Homelessness, healthcare, and, yes, gaming the system

Last updated on: January 31, 2017 at 7:02 am by Jane the Actuary

Homelessness, healthcare, and, yes, gaming the system 2017-01-31T07:02:40-06:00 Jane the Actuary

LOGO Patheos Explore the world's faith through different perspectives on religion and spirituality! Patheos has the views of the prevalent religions and spiritualities of the world.

In the news the other day, “Hawaii bill would classify homelessness as medical condition.” Yes, you read that right:

[Hawaii State Senator Josh] Green last week introduced a bill in the Hawaii Legislature to classify chronic homelessness as a medical condition and require insurance companies to cover treatment of the condition.

But if a doctor wrote a prescription for six months of housing, where would the patient fill the prescription?

That’s where Green wants Medicaid to step in.

He wants to redirect some of Hawaii’s $2 billion annual Medicaid budget to pay for housing.

It’s indeed true that homeless produces/exacerbates health conditions, whether its chronic health problems like diabetes or high blood pressure, or mental health conditions. The homeless have a such a high rate of emergency room visits that it costs less to simply pay for housing, and there have been various pilot programs taking the approach of simply providing for the homeless without setting out preconditions such as sobriety/drug abuse treatment or requiring efforts to find employment. These programs are called “Housing First,” and, per Wikipedia, have been around since 1988, and are already supported by federal grants.

But if this funding isn’t enough for Hawaii, why fund this through Medicaid? Why not just allocate money for such a program from somewhere else in the system, knowing that, in the end, if the state reduces the funds it pays for Medicaid, it’s a win in terms of the overall budget?

Consider how Medicaid is funded: the standard funding method had been for the federal government to match, on a dollar-for-dollar basis, all state spending. If the state spends generously, the federal contribution is equally generous. What’s more, for any individuals who were ineligible under a state’s pre-Obamacare eligibility requirements, but are eligible under Obamacare, the federal government pays 100% of the cost, sliding down to 90% in 2020 and later.

Seems like a recipe for massive cost overruns, if the states design the benefits but the federal government pays, but, if I’m not mistaken, what keeps the states in check is that they have to offer the same benefits to everyone. If, previously, poor mothers and their children, plus the poor disabled and elderly, were eligible, with benefits funded 50/50 between the state and the federal government, and now poor men, childless women, and poor empty-nester couples are also covered, at the 100% -> 90% level, the states can’t increase benefits/doctor reimbursement rates for the second group without doing so for the first group as well.

But the homeless are pretty much all in the second group — while poor mothers with children might technically be homeless, they are more likely to have the stability of a stay in a mothers-and-children shelter and transitional housing support. So if the state can find a way to deem funds for rent to be “medical care” and covered under Medicaid, then they’ve come up with a way to get the federal government to pay 90% of a cost which, if it were to come from housing funds, would otherwise be paid for by the state.

And — it seems to me — this happens repeatedly. There was an article not long ago about a local town deciding whether to repair or replace a bridge. Repair cost considerably less and would have been a perfectly appropriate decision, as the bridge, if repaired, would have plenty of useful life left. Repair would have been the least wasteful decision, both in terms of money spent and the use of resources to destroy a bridge and build a new one. But the feds would provide matching funds for the replacement, not for a repair.

And how many other similar decisions are made, day in and day out, because it’s better to use someone else’s money wastefully than spend your own wisely?

So, to sum up: providing housing for the homeless, good. Trying to get “something for nothing” because the feds are paying, not so much.

Uncategorized

Medicaid

Obamacare

Previous Post

January 30, 2017

How many Americans should die to save Syrian lives? (A "safe zone" question)

Next Post

January 31, 2017 What next, Boy Scouts?

Browse Our Archives

Select a Category Actuarial/Retirement Issues Politics Uncategorized

Select a Month September 2026 August 2026 July 2026 June 2026 April 2026 March 2026 February 2026 January 2026 December 2025 November 2025 October 2025 July 2025 June 2025 May 2025 April 2025 March 2025 February 2025 January 2025 December 2024 November 2024 October 2024 September 2024 August 2024 July 2024 June 2024 May 2024 April 2024 March 2024 February 2024 December 2023 November 2023 October 2023 September 2023 August 2023 July 2023 December 2022 September 2022 August 2022 July 2022 June 2022 May 2022 February 2022 January 2022 December 2021 August 2021 June 2021 April 2021 February 2021 January 2021 December 2020 November 2020 October 2020 September 2020 August 2020 July 2020 June 2020 May 2020 April 2020 March 2020 February 2020 January 2020 December 2019 November 2019 October 2019 September 2019 August 2019 July 2019 June 2019 May 2019 April 2019 March 2019 February 2019 January 2019 December 2018 November 2018 October 2018 September 2018 August 2018 July 2018 June 2018 May 2018 April 2018 March 2018 February 2018 January 2018 December 2017 November 2017 October 2017 September 2017 August 2017 July 2017 June 2017 May 2017 April 2017 March 2017 February 2017 January 2017 December 2016 November 2016 October 2016 September 2016 August 2016 July 2016 June 2016 May 2016 April 2016 March 2016 February 2016 January 2016 December 2015 November 2015 October 2015 September 2015 August 2015 July 2015 June 2015 May 2015 April 2015 March 2015 February 2015 January 2015 December 2014 November 2014 October 2014 September 2014 August 2014 July 2014 June 2014 May 2014 April 2014 March 2014 February 2014 January 2014 December 2013 November 2013 October 2013 September 2013 August 2013 July 2013

TAKE THE

Religious Wisdom Quiz

Rejoice in the Lord always. I will say it again: __!

Select your answer to see how you score.

Pray Rejoice Hope Believe