Biden greenlights California spending federal healthcare funds on homeless housing

(The Center Square) - The Biden administration granted a waiver allowing California to use federal Medicare and Medicaid funding for rental assistance for individuals “transitioning from certain health care facilities, congregate settings, or homelessness,” and for expanding the state’s behavioral healthcare system.

“Californians will soon have more support and more people providing support thanks to the approval by the Biden-Harris Administration of California’s innovative efforts to transform our state’s mental health system for better care and a more accountable system in every community,” said Gov. Newsom in a statement on the waiver.

California is set to receive $98.5 billion in federal healthcare funding for the current 2024-2025 fiscal year for Medi-Cal, the state's taxpayer-financed healthcare system. The waiver will allow the state to use some of this funding for covering six months of rent in many cases, and “permanent rental subsidies and housing” for individuals with “significant behavioral health needs.”

Congressman Kevin Kiley, R-Calif., who unsuccessfully requested an audit of the state’s homelessness spending as a California Assemblyman, shared his concern that the state’s new funding will do little to improve its homelessness situation. Kiley has said he is working with the new Republican Congress to “Newsom-proof” California by ending the state’s $135 billion high-speed rail project and providing taxpayer-funded healthcare for illegal immigrants.

“If past is prologue, any money spent on homelessness by the Newsom Administration will vanish into thin air or make the problem worse. Newsom has spent over $24 billion on homelessness and an independent audit found he lost track of the money,” said Kiley to The Center Square. “All the while, the homeless population in California grew and now accounts for half the unsheltered homeless in the entire country.”

According to the California Policy Lab, 84% of unsheltered homeless in a 15 state survey reported having physical health conditions, 78% having mental health conditions, 75% having a substance abuse problem, and 50% reporting all three at some point in their lives.

The waiver also allows the state to spend $1.9 billion on “scholarships, loan repayment programs, recruitment incentives, residency and fellowship expansions, and professional development” to train more behavioral health workers.

Roughly 2,400 California behavioral health workers in Southern California have been on strike since October, citing case overload and lack of time to conduct essential work outside of seeing patients, such as reviewing patient notes and records before appointments.

Early this year, California voters narrowly passed Proposition 1, a measure backed by the governor to take out a $12.7 billion bond to fund 11,150 new behavioral health beds and 26,700 outpatient treatment slots.

The measure also requires counties — the largest mental health providers in the state outside the prison and jail system — to spend 30% of the several billion dollars per year of mental health services funding they receive from the Mental Health Services Act towards housing interventions for individuals with behavioral health conditions.

Between Prop. 1, the new federal waiver, and MHSA, the state could soon have sufficient substance abuse and mental health treatment capacity to handle coming cases from the state’s new “treatment-mandated felony” convictions, which allow individuals to complete mental health or substance abuse treatment instead of going to prison.