Medicaid Could Expand to Cover Food and Rent for Thousands

Thousands of Coloradans could see their monthly food and rent costs be covered by Medicaid as the state joins several others in asking the federal government to add the expenses to Medicaid coverage.

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The state's proposal said that covering housing and food would help 11,000 people experiencing homelessness yearly. Many of these residents could qualify for six months of free rent under the program.

"Imagine juggling medical bills while struggling to keep a roof over your head," Michael Ryan, a finance expert who runs michaelryanmoney.com, told Newsweek. "By covering basics like food and rent, we're not just treating symptoms; we're tackling root causes. It's giving folks a fighting chance at better health."

Governor Jared Polis has signed the bill, which is now waiting for widespread approval. Colorado will accept public comment on it until July 10.

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Colorado already passed a bill that provided more money to Medicaid to help families in poverty find housing and nutritious food.

The federal government has allowed state Medicaid programs to try out services for five years with federal money under a specific waiver, and roughly 20 other states are trying their own version of a similar proposal.

"For those who would qualify, it would be an incredible leap forward in terms of covering their monthly expenses," Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, told Newsweek.

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"While Medicaid is obviously intended for medical expenses, it's fair to say over the last few decades most have expanded the definition of healthcare to include proper nutrition and stable living conditions. Including both under Medicaid for state recipients who need it isn't as much of a jump in logic as you'd expect."

And due to the timing, many other states may be interested in similar proposals, Ryan said.

"It's like when 401(k) plans first hit the scene," Ryan said. "Once a few pioneers showed it could work, everyone wanted in. I'd say we're at the start of a domino effect."

If Colorado's plan moves through, Medicaid recipients could also get special meals designed for their medical needs.

According to Chris Fong, a Medicare specialist and the CEO of Smile Insurance, Medicaid benefits generally need to have a specific medical benefit, but Colorado can likely make a case that access to nutritious foods and even housing do have quantifiable benefits to medical health.

"It is well founded that poor nutrition leads to poor health which shows some direct correlation from benefit to positive medical result," Fong told Newsweek. "Stable housing can indirectly lead to some health benefits as well. However, this could be a slippery slope. The question that comes to mind is, 'Do we also include paying for gym memberships, dental, clothing, etc.?' All of which could have some positive impact on health."

While Fong said the proposal related to nutritious food is more likely to pass, housing is harder to justify when housing assistance already falls under the Department of Housing and Urban Development.

"There is an extreme shortage of affordable housing properties in the country as a whole," Fong said. "Simply adding a benefit to Medicaid recipients may not be enough. We need more affordable housing developments to meet the need."

As states continue the "unwinding" process of removing recipients from Medicaid post-pandemic, millions of low-income adults and children have lost health coverage entirely due to procedural reasons. This could put proposals like this at the forefront as states rush to make sure their most vulnerable residents keep health insurance.

Ryan said there will still be concerns about defining eligibility and preventing fraud, but he sees Colorado's proposal as a step in the right direction.

"It's recognizing that your ZIP code might matter as much as your genetic code when it comes to health," Ryan said. "It may not be a silver bullet, but it's a start."