The King County Regional Homelessness Authority has proposed a way to partially bridge the gap between the billions of dollars it says it needs to house the region’s 53,532 homeless people and the millions local governments are willing to provide.
Federal Medicaid dollars have helped other cities in Washington and across the country pay to help homeless people with medical and behavioral health needs move into housing, stay there and get them employed. But King County has not taken full advantage of the program for the five years it has been available.
Elected officials and service providers agree transformative improvements to the homelessness system cannot happen without more money.
“We’re not going to solve this problem simply being more efficient,” said King County Council budget chair Joe McDermott, who sits on the Regional Homelessness Authority’s governing committee.
But after the authority called for billions of dollars in its initial five-year plan draft to build and operate tens of thousands of new shelter and housing units, elected officials balked, prompting the authority to scale back its vision.
In prior years, Seattle and King County have repeatedly rejected the authority’s large yearly budget requests. In the last budget cycle, Mayor Bruce Harrell and Budget Chair Teresa Mosqueda both said that a new revenue stream might be needed to stabilize Seattle’s finances and keep up with current homelessness spending.
In an April board meeting, CEO Marc Dones said the authority has been setting itself up to pursue Medicaid funding since its inception.
Some hope much of the labor cost for homelessness services can be transferred onto the federal government so existing local funding can be redirected to expanding services like adding more shelter and housing units.
“In an environment of budget constraints, we have a duty to make the most of all available funding,” wrote authority spokesperson Anne Martens.
But some service providers that are already using this program say it’s administratively difficult to navigate and warn that the authority’s plans may be too ambitious.
New way to fund homelessness services
In the past couple of decades, a growing set of literature shows that providing housing to homeless people can save taxpayers tens of thousands of dollars annually per person. That’s especially true when people have health needs that strain the capacity and budgets of emergency rooms and first responders.
Since then, the state and federal government have increased their investments into the intersection of health care and homelessness.
In 2015 the Centers for Medicare & Medicaid Services authorized the use of Medicaid funding to help house homeless people with medical, mental and substance use issues.
“Evidence shows that housing challenges can lead to poorer health outcomes and higher health care costs for the Medicaid programs,” wrote a spokesperson for the Centers for Medicare and Medicaid Services. “In addition, housing challenges can exacerbate health disparities for many populations, including individuals experiencing homelessness.”
Washington state was the first in the U.S. to take advantage of this authorization, creating the Foundational Community Supports program in 2018.
It works like health insurance: Service providers can enroll clients and bill the Medicaid-funded program for time spent helping them obtain and keep housing or employment. This covers services like homelessness outreach and case management — developing relationships with people living outside, helping them apply for housing and mediating relationships with landlords.
Typically, all that would be paid for by local government and nonprofits’ fundraising.
“What’s happening with Medicaid is one of the biggest breakthroughs in supportive housing investments that has happened in the course of my whole career,” said Debbie Thiele, a managing director at Corporation for Supportive Housing, a national affordable housing nonprofit, which the Regional Homelessness Authority hired to help service providers better navigate Medicaid’s bureaucracy.
The state’s Foundational Community Supports program has received $85 million over the next two years but the state Health Care Authority said that number could increase if service providers enroll more people in the program.
Building off the Foundational Community Supports program, the state created the Apple Health and Housing initiative in 2021.
The programs are eligible to the same population. Whereas Foundational Community Supports pays for the staffing for services, Apple Health and Homes provides the housing. The Washington Legislature has allocated $160 million to purchase and build supportive housing for the Apple Health and Homes initiative.
State Rep. Frank Chopp, D-Seattle, who led the initiative, said this approach targets people who are most visible on streets and who cost taxpayers the most in their use of emergency response systems.
“Not only is it the humane thing to do, but it also saves a bunch of money,” Chopp said.
The state has also asked to be able to use Medicaid funding for housing.
King County trailed others
Even with 42 King County providers registered with the Medicaid-funded state program, the Regional Homelessness Authority said in its five-year plan that it is “significantly underutilized in King County compared to other regions within Washington State,” although the authority said it didn’t know how much money the county was leaving on the table.
Spokane has enrolled 35% more people into Medicaid’s housing program and three times as many people into the employment program as King County despite having less than one-seventh the number of homeless people according to 2022 Point-In-Time Counts.
The state’s Health Care Authority said that the program is still relatively new and the rate of adoption has varied across the state.
A spokesperson for King County, which oversaw dozens of service providers when the program was created, said that in King County the organizations may be slower to adopt the program because they have more clients to serve and are busier.
Medicaid has significantly more hoops to jump through than other funding sources, requiring nonprofits to document what kind of services they provide and how much time they spend with each client, which staff often aren’t used to. And providers would likely be able to serve fewer people in the immediate term as they develop processes to bill Medicaid.
“The housing crisis is much more acute than in other areas of the state,” spokesperson Katherine Rogers wrote in a statement.
Authority plans to cultivate funding
The Regional Homelessness Authority will learn how to navigate the program by acting as a guinea pig and then provide administrative support to service providers to help with the paperwork and bureaucracy of billing Medicaid.
The authority has registered itself with the program and plans to use Medicaid funding to pay for most of the staffing costs for its signature project, Partnership for Zero, an initiative to end unsheltered homelessness in downtown Seattle and the Chinatown International District.
Its 2024 budget projects that Medicaid will provide $5.2 million to pay nearly all of the project’s staffing.
In a meeting in April, elected officials expressed wariness about relying on an uncertain funding source in its budgeting.
Dones told officials the authority would monitor “really, really closely” if the program provides the amount of funding the agency has projected and potentially ramp down parts of Partnership for Zero if it doesn’t.
The authority is simultaneously working on providing technical assistance and simplifying IT systems to help make it easier for providers to bill Medicaid.
The Regional Homelessness Authority said it may also consider making it mandatory for homelessness service providers to utilize this Medicaid funding when it reworks their contracts, scheduled for later this year.
Daniel Malone, executive director of Downtown Emergency Service Center, which participates in the Medicaid program, said his organization is already working on improving its documentation in order to get reimbursed more by Medicaid.
“I think there’s room to do a better job capturing these dollars,” Malone said.
The Low Income Housing Institute, one of the largest homelessness service providers in King County, has been trying to use Medicaid for the past year to bolster staffing costs at its 18 tiny home villages. Chief Strategy Officer Jon Grant said the organization was initially optimistic but learned the process was cumbersome.
He said enrolling a client in the Medicaid-funded program can take weeks or months, and more than half of their applications are initially rejected due to missing requirements. He added that the process of finding people to fix their application will be especially challenging if they live on the street and move around. He said about half of the organization’s tiny home residents end up not qualifying for the Foundational Community Supports program.
Grant said the program was worthwhile as a supplemental revenue stream, but expressed skepticism that it could pay for all of a shelter’s staffing costs.
It may be difficult to convince service providers that these barriers are worth overcoming. Not only do many distrust the authority’s ability to handle administrative tasks, they are often loath to spend their time filling out paperwork, saying that takes time away from serving the thousands of homeless people who need help and wastes front-line workers’ strengths.