L.A. Care, Health Net Commit $114M to Homelessness Initiative

May 10, 2023
Under state’s Housing and Homelessness Incentive Program, Medi-Cal managed care plans can earn incentive funds for making progress in addressing homelessness and housing insecurity as social determinants of health

In Los Angeles, insurers L.A. Care Health Plan and Health Net are investing $114 million over several years to help address the homelessness crisis in Los Angeles County. Earlier this year, the county board of supervisors officially declared a state of emergency to expedite resources to support the unhoused.

The funding for this investment is the result of California's Housing and Homelessness Incentive Program (HHIP), which the state launched with the help of matching funds from the American Rescue Plan Act. HHIP is a voluntary incentive program allowing Medi-Cal managed care plans  to earn incentive funds for making progress in addressing homelessness and housing insecurity as social determinants of health. L.A. Care and Health Net both serve Medi-Cal beneficiaries in L.A. County, and the plans are working together to meet funding guidelines and maximize the project impact. Because the funding is based on membership, L.A. Care will be allocating $80 million to the project and Health Net will allocate $34 million.

L.A. Care Health Plan serves more than 2.8 million members in Los Angeles County, making it the largest publicly operated health plan in the country. A subsidiary of Centene Corp., Health Net serves 3 million members across the state.

In collaboration with the Los Angeles County Homeless Initiative (CEO-HI), the investment will fund two initial strategies:

  • Secure leases on as many as 1,900 housing units and pay for vacancy coverage, damage repair, trash services, greenspace, maintenance, and/or pest control. 
  • Identify the needs of unhoused people through field assessments to determine who requires assistance with Activities of Daily Living (ADL) to move into permanent housing, which is especially important due to the growing number of seniors and people with disabilities experiencing homelessness.

Every year, a combination of local, state and federal funding supports various permanent and time-limited housing vouchers that are used to house people experiencing homelessness in Los Angeles County. But a recent study found only 65 percent of people issued a voucher are able to lease a unit, and it takes an average of 122 days for those lucky enough to find a rental location. L.A.’s tight rental market is partly to blame, but so is illegal landlord discrimination against voucher holders, the majority of whom are people of color.

In a statement Supervisor Hilda L. Solis said, "When people experiencing homelessness try to use their rental vouchers in the private housing market, they often contend with unaffordable rent, tough competition, and historic and systemic housing discrimination. We’ve entered into this collaboration with L.A Care and Health Net during a moment of urgency, but it will expand our housing portfolio over the long term and maximize the use of federal and local rental vouchers to bring people indoors."

L.A. Care Health Plan and Health Net's investment will be used to help the county secure housing units in the private rental market to serve people experiencing homelessness who have rental vouchers. This could include leasing entire apartment complexes, expanding opportunities for shared housing, providing additional support to landlords, and more. Leases could run from three to 10 years.

"Housing is critical for good health. This collaboration will help address housing inequities, which have resulted in health inequities, and it will make the voucher system more effective," said John Baackes, L.A. Care CEO, in a statement. "Securing rental units in advance will ensure vouchers are able to be used and will cut down on the long wait times. At the same time, it will give landlords a long-term funding commitment."

"Health Net is proud to take part in this critical initiative, which will continue to increase access to housing for people experiencing homelessness," said Martha Santana-Chin, Medi-Cal president at Health Net, in a statement. "Together we aim to improve access to whole-person care services for vulnerable Angelenos. Health Net will continue to build valuable partnerships that connect our members to needed housing services, helping to reduce and prevent homelessness in Los Angeles County."