Author: Kendall Eddington

What is Medicaid and Section 1115? 

Medicaid is a federal government-funded health insurance entitlement program that provides health coverage to primarily low-income and disadvantaged individuals. Each state runs its own Medicaid program, so eligibility and benefits may vary. 

While Medicaid benefits traditionally include physician and other health services, Section 1115 of the Social Security Act allows the Department of Health and Human Services to approve experimental projects that would promote Medicaid’s objectives. The Biden-Harris Administration is using Section 1115 waivers to fund their newest initiative, the Housing and Services Partnership Accelerator, which provides funding to eight states (Arizona, California, Hawaii, Maryland, Massachusetts, Minnesota, North Carolina, Washington) and D.C. to promote partnerships across housing and health sectors. States will collaborate with community-based organizations and housing providers to locate and pay for services such as rental assistance, security deposits, and housing transition services. 

The Accelerator is part of the administration’s efforts to address social determinants of health (SDOH), which are the factors where people live, work, and play that affect health outcomes. There is a well-established correlation between housing status and health outcomes—unsafe environments, stress, limited access to resources and transportation and other housing-related factors are examples of how housing status leads to worse health outcomes. People experiencing homelessness experience many health disparities including higher rates of chronic disease, premature deaths and mortality. 

Housing and Healthcare: An Effective Partnership?

Proponents cite that permanent supportive housing is effective in improving health outcomes, especially for individuals experiencing chronic homelessness, because it provides the basic resources and services needed to maintain health. Therefore, they argue the clear link between housing and health makes Medicaid an appropriate bridge between social services and healthcare. 

However, those against using Medicaid funds worry that collaboration efforts may be ineffective. Government agencies, medical services, and nonprofits have rarely worked together in the past. In fact, some studies found that healthcare systems do not collaborate well with non-healthcare organizations because of the differences in their core missions, political power, and lack of expertise. Those in favor of funding housing through services that specialize in housing argue that prioritizing immediate health goals in housing policies is less effective than investing in long-term health outcomes. Due to the mismatches between priorities of health systems and social service organizations, they argue the task of addressing SDOH is mishandled and opportunities to invest in long-term health are overlooked. 

Cost-Benefit Analysis

Additionally, many advocates for Medicaid-funded housing believe that the initiative will save healthcare costs over time. They believe that funding housing services will decrease health disparities related to housing status, which in turn will decrease healthcare spending. 

For example, people experiencing homelessness tend to depend on emergency departments and overnight stays for healthcare. Their dependence on hospitals carry high costs for the healthcare system—the top 5% of hospital users are overwhelmingly poor and housing insecure and are estimated to consume 50% of U.S. healthcare costs. Patients with documented housing instability also require mental and behavioral care at a rate ten times higher than people without housing instability and have longer lengths of stays, with an average of two additional days. Case studies in Oregon, Chicago, and New York have found that permanent supportive housing successfully reduced Medicaid costs, hospital days, and emergency department visits.

However, mixed literature on the cost effectiveness of funding housing services is why many are against using Medicaid for funding. One randomized trial found that providing permanent supportive housing for chronically homeless individuals decreased psychiatric emergency department visits by 38%, but did not decrease medical emergency department visits or hospitalizations. In fact, one study explained that SDOH initiatives often struggle to generate returns on investment due to the complexity of our healthcare system. Those against using Medicaid funds for housing argue it would take away from already struggling programs related to basic health needs. 

Housing Crisis Solutions

Those in favor of Medicaid-funded housing also point out the importance of addressing both health disparities in unhoused populations and also the homeless crisis. Medicaid-funded housing may be the quickest way to help disadvantaged Americans because Medicaid is an entitlement program, meaning anyone eligible for its services is entitled to them. On the other hand, housing programs have budgets set by Congress and are underfunded. 75% of those eligible for federal housing assistance do not receive it, and the overwhelming demand has caused many housing agencies to stop taking applications. Because of the differences in funding structure, some argue that there is a moral obligation to provide care because it is not possible to completely overhaul the housing department and it is unethical to deny services on the basis of waiting to research returns on investment. For example, the director of the Center for Medicaid and CHIP Services noted that saving money is not the only issue at hand and that it is important to also evaluate health outcomes.

However, some argue that this perspective ignores the root problems of the housing crisis and will only threaten the future of housing programs. For example, some housing experts are worried that the funding will also set back people in line for federal housing assistance or even threaten their eligibility for other homeless services. Additionally, a study assessing Maryland’s 1115 waiver program from 2022 explained that limited supply of affordable housing and participant backgrounds (such as rental history, credit scores, and stigmas against people experiencing homelessness) made it difficult to locate housing solutions. One of the hospital executives interviewed in the study said that without government action to increase housing, SDOH cannot really be addressed. 

Takeaways From the Debate

Advocates for Medicaid-funded housing services cite previous Section 1115 initiatives and their successes such as improved health outcomes, healthcare cost reductions, and housing crisis solutions.

Those against the initiative cite problems with past health-housing initiatives, including ineffective partnerships, minimal return on investment, and inability to address root problems of SDOH and long-term health goals.

What types of health insurance do immigrants currently qualify for?

Undocumented immigrants are generally ineligible for federal healthcare programs due to immigration status regulations and public charge rules. Additionally, even immigrants who are “lawfully present” face barriers to accessing federal healthcare programs such as Medicaid and the Children’s Health Insurance Program (CHIP), which are state-administered and federally funded to provide coverage to low-income individuals. They are also excluded from the Health Insurance Marketplace, a federal service that offers tax cuts and subsidies to make insurance more affordable.

Undocumented immigrants in the U.S. are eligible for emergency medical care under the Emergency Medical Treatment and Labor Act (EMTALA), funded through Medicaid. Beyond emergency care, their options are limited to private insurance through employers or primary care at community health clinics. Many rely primarily on EMTALA-covered emergency services, with a high likelihood of not having access to regular medical care or a doctor’s visit in the past year.

The combination of eligibility restrictions for federal programs, limited access to private insurance due to employment in low-benefit jobs, and barriers like fear and language differences makes undocumented immigrants more likely to be uninsured compared to lawfully present immigrants and U.S.-born citizens.

Background on undocumented immigrants in the US

In recent years, several states have started expanding health coverage to undocumented immigrants to improve healthcare access and reduce financial strain on hospitals treating uninsured patients. On the federal level, there was a move towards expansion with the introduction of the Health Equity and Access under Law (HEAL) for Immigrant Families Act in 2023, aimed at eliminating healthcare barriers for all immigrants, regardless of status. Despite these efforts, challenges persist. For example, Illinois had to scale back on enrollments due to budget underestimations, affecting about 6,000 people’s insurance coverage. Moreover, with unauthorized crossings at the US-Mexico border hitting a record 2.4 million in 2023, cities like New York City have been overwhelmed, committing $2.4 billion in 2024 to address the costs related to the large influx of migrants.

The Cost of Providing Care

Proponents of expanding healthcare coverage to undocumented immigrants argue that it would not result in excessive costs and could actually lead to savings in other areas. They point out that providing regular preventative primary care to undocumented immigrants would reduce the need for more costly emergency department (ED) visits, which often arise from lack of insurance. Cost analyses support this view, showing that regular primary care is less expensive than ED services that could have been avoided. Furthermore, the lack of preventative care can lead to advanced chronic diseases, which are significantly more costly, imposing an estimated economic burden of $4 trillion a year. It’s estimated that preventing unnecessary ED visits could save approximately $4.4 billion annually.

Supporters of expanding health coverage to undocumented immigrants say that there is a widely held misconception that immigrants use more healthcare than those born in the U.S. and “drain” medical resources. One systematic review indicates that both private and public health insurance expenditures are lower per capita for immigrants, particularly undocumented ones. Additionally, immigrants tend to pay more in out-of-pocket expenses, contributing more to medical costs than they receive in services. 

Opponents of expanding health coverage to undocumented immigrants argue that such programs are financially unsustainable, pointing to significant costs associated with existing state initiatives. For instance, California’s Medi-Cal program, which was the first to extend coverage to all undocumented immigrants, is projected to cost over $2 billion annually. This comes at a time when California faces a budget deficit of approximately $73 billion, according to estimates by the state’s legislative analyst. Critics believe that simply providing universal coverage is not cost-effective and suggest alternative solutions to improve healthcare access. They advocate for policies like lifting bans on the sale of short-term health plans, which are less expensive, and expanding private insurance options as more sustainable approaches to delivering affordable care.

Illinois recently had to pause its health insurance program for undocumented immigrants due to higher-than-expected costs. Since its launch in 2020, the program expanded twice and was projected to cost $1.1 billion. However, in 2023, the state allocated only $550 million and capped enrollment at 16,500 participants. The governor’s spokesperson attributed the underestimation of costs to unreliable metrics from the U.S. Census, indicating challenges in accurately predicting financial needs for such programs.

How does expanding healthcare access relate to the migrant crisis?

Advocates for expanding health coverage to undocumented immigrants argue that it will improve the overall health of the nation. With an estimated 10.5 million undocumented immigrants in the U.S., proponents suggest that broader access to healthcare could significantly boost public health by increasing care availability and vaccination rates among this population. They point to outbreaks of vaccine-preventable diseases, such as measles, poliovirus, and Covid-19, which have been linked in part to vaccine hesitancy among immigrant groups and low immunization rates. A systematic review indicated that barriers like limited access to medical care and infrequent doctor visits contribute to vaccine hesitancy. Therefore, supporters of healthcare expansion believe that improving access to care for undocumented immigrants will help reduce the spread of preventable diseases.

Opponents of expanding health benefits for undocumented immigrants argue that such policies could incentivize more immigration to the U.S. They cite studies suggesting that immigrants are drawn to areas with generous welfare benefits, including healthcare. Critics also highlight the strain on hospital resources due to increased immigration. For example, Colorado hospitals have seen a significant increase in migrant patients, with a 69% rise in new patients over a three-month period, totaling around 6,000 migrant visits. This surge has led to overcrowded emergency departments, impeding access for other patients and forcing some hospitals to turn patients away. Dr. Richard Zane, chair of the Department of Emergency Medicine for UCHealth, expressed concerns, stating, “We will not deny emergency care. But at some point, access is impeded for everyone.”

Takeaways from the debate: Cost analysis and the effect of coverage expansion on the US population 

The debate over expanding healthcare to undocumented immigrants is complex, entangled with concerns about costs, program sustainability, and the ongoing migrant crisis. Proponents of expansion argue that it could lead to modest costs by reducing unnecessary emergency department visits and would significantly benefit public health by increasing healthcare access for the large undocumented population in the U.S. However, opponents contend that evidence from state programs and healthcare systems points to substantial costs associated with such expansions. Additionally, they argue that the growing number of undocumented immigrants, exacerbated by the migrant crisis, will further strain city, state, and federal budgets.