California health plans distribute funds to address growing rates of individuals experiencing homelessness


Hannah Saunders


Earlier this year, the Los Angeles County Board of Supervisors declared a state of emergency to accelerate resources to individuals experiencing homelessness. While the state continues to scramble to address this growing issue, Medi-Cal managed care plans (MCPs) Health Net and LA Care Health Plan are investing $114 million over the next few years to stymie the crisis. 

LA Care serves over 2.8 million members in the county, while Health Net serves over three million members across California. The pair’s funding is the result of a state-launched program to assist with matching funds from the American Rescue Plan Act, known as California’s Housing and Homelessness Incentive Program (HHIP). The voluntary program allows MCPs to gain incentive funds for making strides in addressing homelessness and housing insecurity as social determinants of health. LA Care is allocating $80 million to the project, while Health Net is allocating $34 million.


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Beatriz Lopez, senior manager of public relations at Health Net, told State of Reform that during the planning stage of this initiative, Health Net engaged with the Los Angeles Homelessness Initiative (CEO-HI) regarding their strategic plan, and found that their goals aligned.

“We wanted to maximize our impact with one-time dollars by creating new solutions to challenging problems. For example, permanent housing ends homelessness, but California’s HHIP funding cannot pay for rent. Therefore, linking HHIP funding to housing subsidies can help make housing more accessible for people experiencing homelessness.”

— Lopez

Data in 2022 from the Los Angeles Homelessness Services Authority found that 69,144 individuals in the county were experiencing homelessness—a 4.1 percent increase from 2020—and about 70 percent are unsheltered. Furthermore, CEO-HIE states that the county has a shortfall of 488,430 affordable homes to the lowest-income renters.

The investment will fund two initial strategies, with the first strategy being to secure leases on up to 1,900 housing units, and to pay for vacancy coverage, damage repair, trash services, greenspace, maintenance, or pest control. The second stage will identify the needs of those who are unhoused via field assessments, which will determine what individuals require assistance with activities of daily living. 

The LA Care and Health Net investment will be used to assist Los Angeles County with security housing units within private rental markets to serve those who have rental vouchers; this may consist of leasing entire apartment buildings, expanding opportunities for shared housing, or providing additional support to landlords. Leases are expected to run three to ten years.

“Overall, we feel it’s our responsibility to the communities we serve to invest in innovative approaches to improve access to quality care and better health outcomes for Californians. The grant period expands over six years (Jan. 1st, 2023 – Dec. 31st, 2028). CEO-HI will submit reports to both Health Net and LA Care with specific data reporting requirements every six months for the entire duration of the program,” Lopez said.

When the Los Angeles County Board of Supervisors proclaimed a state of emergency in January, the board noted that the county’s efforts to address homelessness have led to over 20,000 unhoused people being placed into housing annually, of which 90% remain in housing. On Feb. 7th, the board unanimously approved $609.7 million under the 2023-24 fiscal year budget for the CEO-HI, with the goal of reducing encampments, increasing interim and permanent housing placements, and increasing mental health and substance use disorder services.

This $609.7 million funding will support wraparound services for 22,130 permanent supportive housing units, which will expand the inventory by 4,630 units. Over $60 million of these funds will go towards one-time limited rental subsidies to rapidly house individuals who have recently become unhoused, and to offer services until individuals can gradually tackle rent by themselves. 

These funds will also support 5,029 interim housing beds, increased prevention measures, and $25.5 million will be placed on working with local jurisdictions to resolve encampments and co-invest in housing. In addition to the $609.7 million investment, the board also approved $76.9 million to expand housing services provided by counties, in collaboration with local cities. Under the $79.6 million, $20 million will go towards the ongoing Local Solutions Fund, and additional funds will support the Skid Row Action Plan. 

CEO-HI data for fiscal year 2022-23 shows that 7,385 individuals were sheltered in interim housing, while 4,162 individuals were permanently housed. The data dashboard shows that during this period, 2,525 people have increased their income through employment and benefits, and CEO-HI prevented 1,063 people from becoming unhoused.

On Skid Row, which stretches four miles, 4,400 individuals are experiencing homelessness while 2,695 of those individuals are unsheltered. CEO-HI’s Skid Row Action Plan aims to create hundreds of new interim housing beds at numerous hotels and motels in the area, and about 350 of those will include services for those with the most complex behavioral and physical health needs. Los Angeles County will create a Safe Landing facility on Skid Row, which will be open 24/7 for those seeking interim housing beds, clinical services, and connections to other resources. Over the next three years, the interim housing beds are projected to serve about 2,500 people.

As the county continues to work towards addressing the homelessness issue and moving unsheltered individuals into housing, Lopez said Health Net remains dedicated to the communities they serve.

“We will continue to build bridges throughout California to care by expanding access to providers and connecting patients, providers, and communities. This approach delivers seamless, coordinated care for every member, at every stage of life. This historic partnership is just the beginning of our work to support those experiencing homelessness. We are continuously and consistently working to scale and become model/evidence-based practice for other programs statewide.” 

— Lopez