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Addressing Social Drivers of Health With Medicaid Managed Care

By Kelsie George  |  July 26, 2022

Meeting basic needs such as housing, transportation and food improves health outcomes for families, especially for often medically and socially complex Medicaid beneficiaries. Many state Medicaid programs use managed care to coordinate the health and social components with the greatest health impact, a strategy that research shows cuts program costs by reducing emergency visits and hospital readmissions.

What Social Factors Drive Health Outcomes?

The conditions and environments in which people are born, live, learn, work, play, worship and age affect a variety of health outcomes. These are generally referred to as social determinants of health—or social drivers of health—and include factors such as socioeconomic status, education, neighborhood and physical environment, employment and social support networks, as well as access to health care.

Social Drivers of Health

  • Economic stability: The connection between financial resources—income, cost of living, socioeconomic status—and health. This includes poverty, employment, food security and housing stability.
  • Education access and quality: The connection of education to health and well-being. This includes early childhood education, educational attainment, language and literacy, and quality of education.
  • Health care access and quality: The connection between people’s access to and understanding of health services and their own health. This includes access to health care, health insurance coverage status, and health literacy.
  • Neighborhood and built environment: The connection between where a person lives—housing, neighborhood, environment—and their health and well-being. This includes quality of housing, access to transportation, availability of health foods, air and water quality, and neighborhood crime and violence.
  • Social and community context: The connection between relationships and interactions with family, friends, co-workers and community members. This includes cohesion within a community, civic participation, discrimination and incarceration.

How Can Medicaid-Managed Care Address Social Drivers of Health?

Managed care organizations, also known as MCOs or managed care plans, provide comprehensive acute care and sometimes long-term services and supports to more than 70% of Medicaid beneficiaries nationally, making it the primary method of delivering services to them. Forty states and Washington, D.C., use MCOs and are leveraging their care coordination and preventive care capabilities to address social drivers of health for Medicaid beneficiaries. Thirty-three states contract with MCOs to address social drivers of health through various actions, including:

  • Screening enrollees for social needs.
  • Referring enrollees to social services.
  • Tracking the outcome of referrals to social services.
  • Employing community health workers or other nontraditional health workers.
  • Requiring community reinvestment.

Illinois HB 449 established the Housing Is Recovery pilot program in 2021 to provide affordable housing through a bridge rental subsidy, or monthly rental assistance to establish safe, affordable and permanent rental housing. The subsidy is combined with access to recovery support services and treatment for individuals with a serious mental illness or a substance use disorder. The legislation also requires the Department of Human Services mental health division to develop public-private partnerships with hospitals and MCOs to match state dollars invested in the program to reduce preventable hospitalizations, overdose deaths and institutionalizations.

North Carolina is piloting Medicaid payment for services in four domains—food, housing, transportation and interpersonal violence and toxic stress—through a Section 1115 waiver approved by the Centers for Medicare & Medicaid Services in 2021. Services are reimbursed on a per-member, per-month basis and have been gradually implemented over time: Food services began in March, housing and transportation services in May, and toxic stress and cross-domain services in June. Using rapid-cycle assessments, the state will assess the effectiveness of interventions and make adjustments throughout the five-year approval period.

Looking Ahead

CMS released renewed guidance on how states can address social determinants of health through Medicaid and the Children’s Health Insurance Program. In response, many states are exploring options to address housing-related services and supports, nonmedical transportation, home-delivered meals, educational services and employment supports to improve health outcomes for Medicaid beneficiaries and reduce unnecessary medical costs.

Kelsie George is a policy associate in NCSL’s Health Program.

This resource is supported by the Health Resources and Services Administration of the U.S. Department of Health and Human Services as part of an award totaling $767,749 with 100% funded by HRSA/HHS. The contents are those of the author(s) and do not necessarily represent the official views of, nor an endorsement by, HRSA, HHS or the U.S. government.

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