California Governor Gavin Newsom wants to use federal healthcare funds to cover at least six months of rent for the state’s disproportionately large homeless population and those facing homelessness.

Newsom recently requested that President Biden approve a new “transitional rent” program under Medi-Cal, the state’s version of Medicaid. According to The Los Angeles Times, state officials modeled the program after similar federally approved programs in Oregon and Arizona, which paid up to six months of rent or temporary housing for low-income enrollees who rely on the state’s healthcare.

“I’ve been talking to the president,” Newsom told KHN. “We cannot do this alone.”

Newsom and supporters of the aid argue that temporarily covering homeless people’s rent would save taxpayers money rather than increasing funding for institutional care in California’s hospitals, nursing homes, and jails.

A spokesperson for the Centers for Medicare & Medicaid Services, Bruce Alexander, declined to tell The New York Times whether the federal government would approve the request.

According to the National Academy for State Health Policy, Medicaid cannot pay for housing development or rent directly. It can, however, assist enrollees in finding and maintaining housing.

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Through a federally approved program called CalAIM, which The Times reported has transformed Medi-Cal, the state’s program has already assisted low-income patients with rental security deposits for homeless people and those facing eviction.

According to the Public Policy Institute of California, homelessness in California continues to rise, with the state having the largest population for more than a decade.

Based on the federal government’s imprecise “Point in Time” count of the nation’s homeless population, the think tank estimated that 30% of the 233,832 people experiencing homelessness in the United States live in California last year. However, Newsom admitted that those figures are unlikely to reflect the state’s official count, which he believes is much higher.

According to state data, 5% of Medi-Cal patients account for 44% of program spending, according to researchers at the institute. Many patients are homeless and frequently visit emergency rooms, which are primarily covered by the state health program.

“California emergency departments (EDs) treated about 143,000 people experiencing homelessness in 2019, according to hospital discharge records,” the report reads. “Almost half of homeless patients visited the ED four or more times in the year.”

Insurers argue that combining healthcare and housing funds would not save the state money, while healthcare officials point to California’s affordable housing crisis, which Newsom has publicly acknowledged.

“We can design incredible Medicaid policies to alleviate homelessness and pay for all the necessary supportive services, but without the adequate housing, frankly, it’s not going to work,” Dr. Margot Kushel, director of the University of California-San Francisco’s Center for Vulnerable, told The Times.

If approved by the Biden administration, homeless people in California who qualify for limited assistance could begin receiving rent payments by 2025, costing the state an estimated $117 million per year once operational.

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According to The New York Times, 11,000 people have already signed up for Medi-Cal housing services.

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