- Associated Press - Wednesday, January 22, 2014

CHICAGO (AP) - Broderick Alexander lived on the streets for more than two years in Chicago, but since 2005, he has slept in his own apartment. A case manager visits once a month, helping the 48-year-old set goals as part of a program that links housing to health care.

Knowing he has a safe place to return at night, Alexander said, helps him focus on taking his medications and staying out of the emergency room.

“My five- to seven-year goal is to become independent of all social service programs and leave this housing opportunity for someone else to have,” Alexander said, adding that he is looking for a job as a commercial truck driver.

Since the 1990s, a movement toward housing-as-health care that started in New York City has spread to several cities, including Chicago, Seattle and Toronto. In Illinois, Gov. Pat Quinn now wants to expand such supportive housing - typically apartments with subsidized rent and help from social workers - by using federal and state Medicaid dollars.

Quinn’s administration is making its pitch by promising future savings in health care costs. Federal rules don’t allow states to build housing or pay rent with federal Medicaid money, but states can seek permission to try new approaches.

At a legislative committee hearing held Wednesday in Chicago, officials said the Quinn administration’s entire Medicaid waiver proposal - which goes beyond housing to restructure much of the state’s Medicaid system - would bring in, if approved, $3.2 billion in new federal funds over five years.

Illinois will post its proposal online Feb. 7, then public feedback will be taken for 30 days before the plan is sent to federal Medicaid officials on March 10.

“The ability to stabilize people in housing is very important. We view it as critical to the success of our efforts,” said Illinois Deputy Gov. Cristal Thomas, who is leading the initiative for the governor’s office.

The idea is to target poor adults who are homeless or living in institutions because of disabilities, such as severe mental illness or substance abuse. Although the research is mixed on whether the approach saves taxpayer dollars when housing costs are included, some studies have shown it can save money in health care by reducing emergency room visits and hospital stays.

The Illinois plan sketches out how insurance companies with Medicaid contracts could get financial bonuses for finding housing and support teams for homeless and institutionalized patients. The plan is one piece of a 78-page draft Medicaid waiver that needs fleshing out before it’s submitted for federal approval.

The Illinois Medicaid program covers 2.8 million people with a budget of $17.8 billion. With an expansion of Medicaid under the new federal health care law, the program could soon cover 3 million poor and disabled Illinois residents - and the waiver being sought by the state would touch almost all those people.

Quinn last week created the Office of Health Innovation and Transformation to oversee the waiver and coordinate the program’s numerous parts.

However, a financial analysis isn’t yet complete, so it’s unclear how much money the state thinks the waiver will save in health care costs. The lack of specifics is raising concerns among some lawmakers, including Chicago Democrat Rep. Greg Harris, who chaired the committee holding Wednesday’s hearing on the waiver.

“I hear ‘transformation’ and ‘realignment’ and ‘person-centric,’ but how is this going to make people’s lives better?” Harris said in an interview.

The state wants to consolidate nine programs that now serve different categories of disabled people, including adults and children with developmental disabilities, medically fragile children, people with HIV or AIDS, the elderly and people with physical disabilities.

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