Seattle lawmakers often look to other cities for progressive solutions to homelessness. The city is moving forward with safe injection sites modeled after Vancouver and a barrier-free housing facility modeled after San Francisco’s Compass Center. Officials even considered replicating a notoriously ill-fated Portland measure that allowed camping on city sidewalks and parks.
A bill proposed in Hawaii that would allow doctors to write homeless people prescriptions for housing may similarly catch the attention of lawmakers.
Hawaii’s Senate Bill 2 would classify chronic homelessness as a medical condition and give doctors the power to order insurance companies to cut rent checks as treatment. Under the bill, every insurance plan in Hawaii would require coverage for the treatment of homelessness.
In addition to covering rent payments for the homeless, physician-approved treatment plans would compel insurance coverage for mental health services, substance abuse, case management, personal care, and further home or community-based services.
The bill’s sponsor, Senator Josh Green, is also a practicing emergency room physician who has seen firsthand the costs of homelessness on his state’s Medicaid system.
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“Homelessness is a medical condition in my mind,” he said. “When they come to the ER, we can put a Band-Aid on their problems. We can maybe help them with a staph infection or just provide some general support like showers or meals. But we never really help them change their life. The costs are very great to have this cycle repeat over and over again. People suffering, calling an ambulance, being taken to the ER, seeing me, and then being put back onto the street.”
Research out of Hawaii indicates that when chronically homeless individuals who suffer from mental illness or drug addiction are housed, their health-care costs drop by 43 percent. Similar research in Washington state published in the Journal of the American Medical Association found that prior to receiving housing, the annual medical costs of 95 study subjects totaled a whopping $8.2 million. That’s equivalent to $86,000 a year per person. Just one year following the subjects’ stay in supportive housing, those costs plummeted by 53 percent to $43,000.
Senator Green reports similar costs and potential savings in Hawaii.
“The condition of being chronically homeless tends to cost six-figures, over $120,000 for many individuals,” he said.
Even while providing near-market rates for rent payments, roughly $18,000 a year, Green believes the cost savings to Medicaid would be massive.
Data provided by the senator showed that 3.6 percent of Hawaii’s Medicaid-eligible population consumes 61 percent of the budget, to the tune of $1.2 billion per year. Among the highest benefit users are the chronically homeless. Enacting Green’s bill would be a game-changer, he says.
“The moment we actually help these individuals who are homeless, we drop that cost by 43 percent. We can expect to save roughly $400 million in a tiny state like Hawaii.”
Green is receiving bipartisan support from fiscal conservatives looking to reduce health-care costs and Liberals concerned with social justice and providing access to housing for all citizens. Even insurance providers have signaled support.
“They’re already paying for things like Hepatitis C treatment, which costs up to $150,000. There should be no reluctance to pay as much as $1,800 a month of housing if it, in turn, saves them $5,000 or $7,000 of expenditures that are unnecessary,” says Green.
To counter fraudulent claims from those looking to cheat the system, Green’s bill requires that prescriptions for housing would be limited to the mentally ill and those suffering from serious substance abuse addictions. Dispensing prescriptions for any treatment, including housing, would require a doctor’s assessment and be subject to prior authorization from insurance providers.
The success of Hawaii’s bill does face greater logistical hurdles than fraud. Implementation of the plan would require an enormous expansion of case managers to oversee placement and services for high-need individuals. Additionally, as is the case in Seattle, freeing up affordable housing units in a booming market will require new developments.
Further, the program’s steepest challenge may come from the courts. The bill would test the legal boundaries of how states can dispense Medicaid funds, which cannot be used for rent.
Theoretically, by classifying homelessness as a medical condition, Green believes Hawaii could circumvent the statute by claiming that payments for housing are a justified medical expense. In the current Medicaid system, benefit payments can be used for nursing homes, adult family homes, and assisted living facilities, all of which include room and board. Hawaii’s proposal seeks to extend that provision for all housing options for the homeless.
The bill also faces local opposition from tenant associations and citizens concerned with the placement of the homeless in their buildings. It’s a classic NIMBY [Not in my back yard] response, Green says.
Yet, “the problem is already in everyone’s backyard in urban centers. Individuals who are suffering are everywhere. They’re our relatives, they’re our friends, they’re the people we see every day … the facts remain that when you have less than 4 percent of a group consuming over 60 percent of your budget … we almost can’t afford not to do this.”
Should the bill pass in Hawaii’s Legislature, it will take effect Jan. 1, 2018.