Federal health care dollars are helping to house homeless Californians. Trump could stop that

Two years ago, Gov. Gavin Newsom’s administration unveiled a new plan to help solve the homelessness crisis: It began using health care providers, funded through Medi-Cal, to help people get and stay housed.

Now, with President-Elect Donald Trump about to take office, some health care organizations, homeless service providers and other stakeholders throughout California worry  the program may fall apart just as it’s starting to make a difference. It’s one of many potential shake ups they’re bracing for as they prepare for a new federal administration unlikely to see eye to eye with the Golden State on many of its social welfare policies. 

“It makes us all very nervous,” said John Baackes, outgoing CEO of Medi-Cal provider L.A. Care Health Plan.

CalAIM, launched in 2022, is an expansion of Medi-Cal that allows health insurance to pay for certain things that aren’t considered traditional medical care — such as services to help homeless Californians find and keep housing. Proponents say it’s brought a much-needed infusion of money into the state’s overburdened homeless services system. 

But because states aren’t typically allowed to spend Medicaid dollars on those types of services, California had to get special permission from the federal government. That permission, in the form of two waivers, expires at the end of 2026. 

That means the fate of CalAIM rests in the hands of the Trump administration, which can decide whether to renew the program, scale it back or change it. Trump has yet to give any indication of what he would do (or even whether this specific California program is on his radar) and most stakeholders agree any changes he makes probably wouldn’t come until 2026. But the uncertainty is compounding the stress on already overburdened homeless service providers, who routinely receive short-term, one-time grants instead of permanent funding, making it difficult to plan for the future.

“CalAIM has been one of the most important and, I think, under-appreciated policies of the Newsom administration, to try to better connect our health system and our housing system,” said Tommy Newman, vice president of public affairs for United Way of Greater Los Angeles. “And the risk of going backwards on that is scary.”

Newsom’s administration wouldn’t specify what, if anything, it is doing to safeguard CalAIM.

“California will continue to work collaboratively with our federal partners to ensure that families in our state are healthy and our communities are vibrant places to live and work,” Anthony Cava, spokesperson for the Department of Health Care Services, said in a statement. “While we don’t typically speculate on the potential impacts of a new federal administration, we remain committed to protecting Californian’s access to the critical services and programs they need.”

What is CalAIM?

The goal of CalAIM is to address factors known as “social determinants of health” for low-income Californians. It’s hard to stay healthy when you don’t have access to basic necessities, such as housing and nutritious food, for example. Ultimately, it’s supposed to save the state and the feds money by helping people avoid expensive emergency room visits.

In 2023, more than 68,600 Californians used the three services known as the “housing trio” under CalAIM. These are services designed to help them find housing, stay housed or pay for move-in costs such as security deposits and first and last month’s rent, according to the most recent state data available. Only CalAIM’s “medically tailored meals” service (which helps people with conditions such as diabetes access food that meets their dietary needs) was nearly as popular, with nearly 62,700 users.

CalAIM provides a total of 14 of these services, or “community supports,” which also include medical respite care for people who recently left the hospital, asthma remediation — think air filters, dehumidifiers, mold removal — and sobering centers. CalAIM also provides something called “enhanced care management,” which pairs Medi-Cal members with an intensive case manager who can help them access everything from a doctor to a dentist to a social worker. 

One-time grants, doled out to health plans as an incentive for them to ramp up CalAIM services, also helped fund the construction of new affordable housing.

Abode Services, a nonprofit that provides shelter, housing and other aid for unhoused people across seven Bay Area counties, serves more than 1,000 Californians through CalAIM, said CEO Vivian Wan. In Napa County, Abode uses CalAIM to provide case management services to help people move from homeless encampments into shelter and housing. In Santa Cruz County, Abode uses CalAIM funds to replace the federal COVID-19 homelessness funds that poured in during the pandemic but have since dried up. 

Abode and other nonprofits also use CalAIM funds to fill an important gap often left by other grants: services for formerly homeless people living in subsidized housing. State programs such as Homekey offer money to buy or build homeless housing, and vouchers pay for tenants’ rent, but there’s often nothing left to fund the case management, counseling and more that’s crucial to help people with physical and mental health conditions, or addictions — the people Newsom has made a priority in his effort to clear encampments — hold onto their housing. 

“I shudder to think what would happen if we had all of the mandates from our development side of supporting people through coordinated entry, taking really vulnerable people, and we then reduced the services down to bare bones,” Wan said.

What would Trump do to CalAIM?

It’s difficult to speculate about what the Trump administration will do with CalAIM. Celebrity physician Dr. Mehmet Oz, Trump’s pick to run the Centers for Medicare & Medicaid Services, has no prior experience with the agency and therefore no track record that could provide clues as to how he will act. 

Any changes likely would be felt at the end of 2026, when California attempts to renew its CalAIM waivers. But it’s not unheard of for a president to terminate a waiver early. After President Joe Biden took office in 2021, he pulled waivers, authorized by Trump, that had allowed states to require Medicaid recipients to prove they were working or unable to work. But that was an extreme situation, as multiple courts had already shot down those waivers.

“It’s not like CalAIM is going away tomorrow, or even in January,” said Sharon Rapport, director of California state policy for the Corporation for Supportive Housing. “But after that, I think that’s where the questions are: What could happen then? And the fact that it’s California, and not Trump’s favorite state, I think makes people worried.”

Plans to expand future coverage also could be at risk. Health plans are rolling out new frameworks under CalAIM to offer health care to people in jail and prison up to 90 days before they are released. California also has applied to amend one of its federal waivers to add rental assistance to the services CalAIM offers. If that’s approved, the state would be allowed to use Medi-Cal to pay for up to six months of rent for homeless and at-risk people who are leaving settings such as jail, prison, the hospital, or an in-patient mental health or substance abuse facility.

But a recent article by conservative think tank the Manhattan Institute questions the use of health care funds to pay for social services — a potential bellwether that suggests the new administration might not be supportive of programs like CalAIM.

“Even if a social welfare program is a well-intentioned and wise idea, that does not make it health-care,” wrote Manhattan Institute senior fellow Chris Pope. “Health care costs will not be greatly reduced by expanding the meaning of health care to cover every social service; nor would doing so distribute nonmedical assistance to those who need it most.”

The Trump administration also could change the waivers before renewing them, forcing California to pare down the services CalAIM offers, or add work requirements. 

Trump, as well as the Republican-controlled Congress, are likely to support requiring Medicaid recipients to prove they are either working or are unable to work. The last time he was in office, Trump approved 13 state waivers that included work requirements, before the Biden administration later withdrew them. Project 2025, a conservative governing blueprint written by the Heritage Foundation, also prioritizes work requirements.

Work requirements historically lead to people, especially low-income people and people of color, losing benefits, according to research by the progressive think tank Center on Budget and Policy Priorities. It found many recipients are working but have a hard time providing the necessary paperwork to prove it, while others can’t work due to obligations as full-time caregivers or a lack of child care. 

Trump and Congress also could impose more sweeping cuts to Medicaid as a whole, which could affect California’s ability to continue programs such as CalAIM. 

There are ways California could safeguard at least some of its CalAIM services, by baking them into Medi-Cal as permanent benefits, Rapport said. Her organization is pushing for the state to do that with CalAIM’s three housing services.

Staff at L.A. Care already are thinking about how they could continue offering CalAIM services to their members if the Trump administration cuts the program. It would require some significant rearranging of funds, said Chief Medical Officer Dr. Sameer Amin. His organization has nearly 16,800 people enrolled in CalAIM services to help them find and keep housing.

“My concern is that the housing crisis in LA County is not something that happened overnight, and it’s not something that can be corrected overnight,” he said. “It really requires a sustained effort over the course of years and a significant amount of investment. And if we don’t do the investment that we need to do, if we have to reprioritize away from some of these programs, my concern is that these folks are not going to get the health care that they need because they are not housed.”

Staff writer Kristen Hwang contributed to this story.