For more than a decade, researchers and advocates have argued that housing is a fundamental part of health care. Beginning this fall, for the first time, federal Medicaid dollars will start going toward paying some people’s rent.

It’s a significant policy development. Congressional regulations have long barred Medicaid funds from being used to pay for rent for people staying outside of nursing homes or medical facilities like hospitals. And while some states have used philanthropy or state-based Medicaid funding to pay for housing, those pots of money were extremely limited. Now, with rates of unsheltered homelessness reaching record highs in 2023, and rents growing to their most unaffordable levels ever, some states are preparing to use federal Medicaid dollars in the hopes that health will improve as housing stabilizes.

The Biden administration has made this possible through a longstanding Medicaid waiver program that allows states to test out new Medicaid ideas.

For nearly a decade, the federal agency that runs Medicare and Medicaid has been warming to the idea that housing could be health care. Since 2015, the Centers for Medicare and Medicaid Services has affirmed that Medicaid funds could go toward services that help people move into new housing, like moving costs or security deposits. In 2018, an influential federal commission told Congress that, while it’s long been known that poor housing conditions can worsen health outcomes, more recent data suggests that providing supportive housing to chronically homeless people also reduces ER visits in ways that case management or other outpatient services does not.

The “housing is health care” mantra got another major boost during the pandemic, when calls to stay at home to avoid catching and spreading disease grew louder and more urgent. Communities that halted evictions saw lower rates of Covid-19, a stark example of how access to housing is linked to health.

And in 2022, the Biden administration encouraged states to consider using Medicaid dollars for “health-related social needs” like housing, nutrition, and transportation — part of a broader White House effort to address social determinants of health.