Biden Administration Allowing States to Spend Medicaid Money on Food, Housing

The Biden administration has started to grant states’ requests to utilize Medicaid funding to pay for nonmedical but health-related needs like groceries and housing support in order to decrease the need for medical intervention.

In October last year, the U.S. Centers for Medicare and Medicaid Services (CMS) approved a section 1115 demonstration initiative (pdf) for Arizona, allowing the state to use Medicaid funds to pay nonmedical expenses.

Such expenses include community and transitional housing support and rent for individuals with clinical needs or those who are transitioning out of institutional care. It also includes funding for homeless shelters, rent and temporary housing for individuals in the child welfare system, and medically tailored meals, among other things.

The initiative went into effect in October last year and will remain in effect until September 2027.

Other section 1115 demonstration initiatives have been granted in Arkansas (pdf), allowing the state to use Medicaid funds to pay for things such as critical housing and nutritional services, and in Massachusetts (pdf) and run through 2026.

CMS also approved a similar demonstration initiative for Oregon, The New York Post reports.

The granting of the requests to use Medicare funding for nonmedical expenses comes as policymakers are reportedly trying to determine whether “food as medicine” programs can enhance health benefits and cut costs.

According to the American Society for Nutrition, the concept of “food as medicine” sits “at the crossroads of nutrition and healthcare.”

White House ‘Supports’ Initiatives

“It may take many forms, including medically tailored meals, medically tailored groceries, and produce prescription programs,” according to the society, which notes that “evidence suggests food as medicine can work.”

The initiatives coincide with the Biden administration’s National Strategy on Hunger, Nutrition, and Health (pdf).

According to the White House’s strategy, such initiatives can “effectively treat or prevent diet-related health conditions and reduce food insecurity” and the Biden administration “supports legislation to create a pilot to test covering medically tailored meals for individuals in traditional Medicare who are experiencing diet-related health conditions.”

“This proposal builds on a demonstration initiative in Medicaid, where HHS Centers for Medicare & Medicaid Services (CMS) will provide authority for states to test Medicaid coverage of additional nutrition services, and supports using Medicaid section 1115 demonstration projects,” the national strategy reads.

Elsewhere, a September statement from CMS Administrator Chiquita Brooks-LaSure, states that such initiatives are needed to “improve quality and access, reduce health disparities, and improve health equity, for those who need it most.”

Such initiatives will also help “address the root social causes of health concerns, like lack of access to nutritious food and housing insecurity” according to Brooks-LaSure.

However, others aren’t so sure.

Rep. Glenn Thompson (R-Pa.), who chairs the House Agriculture Committee, told The Wall Street Journal that while the “food as medicine” concept has merit, further studies are needed.

“In Washington sometimes, bright shiny things get a lot of attention and sometimes a lot of financial resources,” he said. “Let’s look at what the needs are.”

Meanwhile, the Government Accountability Office (GOA) has previously noted that the Department of Health and Human Services’ budget neutrality policy and process “did not provide assurances” that all Medicaid demonstration waivers will be “budget neutral” to the federal government, as they are supposed to be.

‘Blurring the Lines’

“We have had long-standing concerns with HHS’s policy, process, and criteria for reviewing and approving section 1115 demonstrations, including the absence of a federal process for obtaining public input and a lack of transparency in the basis for approved spending limits,” the GOA noted in a previous report (pdf).

Further concerns surround what exactly the funding is being spent on, with The Wall Street Journal reporting that some states are using Medicaid funds to pay for non-health-related items like air conditioners to “help with extreme heat” or “filtration devices that boost air quality.”

Medicaid covers roughly one in four Americans, although a study conducted in 2022 by nonprofit, nonpartisan organization West Health and global analytics firm Gallup found that 112 million U.S. adults, making up around 44 percent of the population, struggle to afford medical insurance.

Another 35 percent of U.S. adults said they have had to cut back utilities in order to pay for necessary health care.

It is unclear how many more states plan to apply for section 1115 demonstration initiatives in the future but some experts are already raising concerns, citing the fact that there are already multiple federal funding programs in place to address the areas covered by the expanded Medicaid funding.

“This is really the first I’ve seen the federal government push food and air conditioners and other things as allowable. We already have the SNAP (Supplemental Nutrition Assistance Program),” Gary D. Alexander, head of the Medicaid and Health Safety Net Initiative for Paragon Health Institute, told The Wall Street Journal. “It seems like it’s blurring the lines.”

The Epoch Times has contacted the U.S. Centers for Medicare and Medicaid Services for comment.

Reporting from The Epoch Times.