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Newsom requests federal Medicaid dollars be used for 'transitional rent' to curb state's homelessness crisis

Photo by Justin Sullivan/Getty Images

California Democratic Governor Gavin Newsom is requesting that the Biden administration allow Medicaid dollars to be used to cover six months of "transitional rent" to curb the state's homelessness crisis, the Los Angeles Times reported.

With California facing an ever-worsening homelessness problem, Newsom proposed a new program called "transitional rent." If approved by the White House, it would allow federal health care funds to be used for rent payments.

The program would provide up to six months of rent or temporary housing for low-income participants who rely on the state's health care system. Approximately 30% of the country's homeless population resides in California.

If approved, the state's version of Medicaid, Medi-Cal, would fund housing subsidies for homeless people and those at risk of losing their homes.

"I've been talking to the president. We cannot do this alone," Newsom stated.

Proponents of the experimental program believe it will be cheaper for taxpayers to cover rent than it would be to cover hospital care, nursing home, and jail costs. However, the median rent in California is nearly $3,000 per month.

Former Medi-Cal director Mari Cantwell told the Times, "The ongoing conversation is how do we convince the federal government that housing is a healthcare issue."

"You have to convince them that you're going to save money because you're not going to have as many people showing up at the emergency room and in long-term hospitalizations," Cantwell added.

Medi-Cal director Jacey Cooper stated, "It's a pretty big challenge; I'm not going to lie."

"But we know that people experiencing homelessness cycle in and out of emergency rooms, so we have a real role to play in both preventing and ending homelessness," Cooper continued.

With the Biden administration's approval, Medi-Cal, which has roughly 15.4 million enrollees, could start providing rent payments as early as 2025. Nearly 11,000 people enrolled in the state's health care could benefit from the new program, which is estimated to cost approximately $117 million per year, the Times reported.

Bruce Alexander, a Centers for Medicare and Medicaid Services spokesperson, declined to comment on whether the Biden administration plans to approve the experimental program. However, similar programs have previously been approved in Oregon and Arizona.

Newsom argued that the state's homelessness crisis "will never be solved without first solving the crisis of housing."

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