Massachusetts Medicaid Housing Supports Reduced Health Care Costs Among Adults With Behavioral Health Conditions

In 2020, Massachusetts Medicaid launched the Flexible Services Program (FSP) to fund housing and nutrition assistance services for beneficiaries in accountable care organizations. To evaluate the program's impact on health outcomes for beneficiaries with behavioral health conditions, we compared changes in total health care costs, hospitalizations, emergency department (ED) visits, primary care visits, and hospital readmissions among 6,575 FSP participants enrolled during the period 2020-23 with those of a comparison group of people who were eligible for but did not receive FSP services. We also conducted the analysis with a secondary comparison group of 6,419 similar beneficiaries enrolled in Medicaid managed care organizations that did not offer FSP services. Relative to the primary comparison group, per person health care costs for FSP participants were $2,117 lower six months after beginning the program and $3,260 lower at twelve months. ED visits were 5 percent lower and readmissions were 36 percent lower at twelve months among FSP participants compared with the primary comparison group. Analyses using the secondary comparison group found similar reductions in costs at six months after FSP initiation, larger cost reductions at twelve months, and similar twelve-month declines in readmissions. These findings support the continuation of housing assistance programs for Medicaid beneficiaries with behavioral health conditions.