17 July 2022 |

Big Insurers Invest in Affordable Housing

By workweek

UnitedHealth Group (UHG) will invest $25M into retail, housing and social services to promote healthier communities in New England. The insurer isn’t alone. CVS Health, Kaiser Permanente and Anthem have also recognized the benefits of affordable housing investments, pouring over $1B into affordable housing endeavors to date.

The Deets

UHG will invest $25M into the Healthy Neighborhoods Equity Fund, a private equity firm investing in healthy communities in New England. The investment is predicted to build 1,000 homes.

UHG is no stranger to affordable housing. This past April, UHG invested $100M into affordable housing in Georgia, North Carolina and Oregon. So far, the insurer has invested around $800M into building affordable housing, having built over 19K homes. Of course, UHG isn’t providing such investments because it’s the “right thing to do.” There are financial benefits. They found such affordable housing investments are associated with the following:

  • 12% decrease in Medicaid expenditures.
  • 20% increase in PCP utilization.
  • 12% decrease in ED visits.

Other large insurers see the benefits as well. CVS Health has invested $1B into affordable housing over the years while Anthem and Kaiser have invested over $400M.

Dash’s Dissection

People can’t have their safety needs met until they’ve met their physiological needs. In other words, people can’t expect someone to be in good health and employed if they’re struggling with housing instability. These are the tenants of Maslow’s Hierarchy of Needs.

Humans need to fulfill physiological needs before fulfilling safety needs. Stable housing offers immediate stability, allowing people to effectively care for health and employment.

An affordable housing study out of Portland, Oregon, supports the importance of meeting housing needs before meeting health and employment needs. The study included tenants on Medicaid at Bud Clark Commons, one of many housing-first/harm reduction-based permanent supportive housing programs across the country. The researchers analyzed the impact of stable housing on healthcare utilization and outcomes and self-reported health outcomes. Some findings:

  • After 1 year follow-up: a significant 75% decrease in hospitalizations and a significant 20% increase in the number of tenants with a primary care provider. There was also a significant 60% decline in unmet mental health needs and a significant 40% decline in unmet health needs.
  • After 2-year follow-up: average Medicaid costs decreased from $2,000 per month to $900 per month, a significant 55% decline. There was also a significant 50% decrease in ED visits.
  • Overall: a significant 60% decline in subjective unhappiness.

Homelessness is a major public health problem the U.S. is struggling to solve. Investments from insurers and health systems into affordable housing are a significant step in the right direction to ensure people’s basic physiological needs are met. Doing so provides stability for people to take care of their safety needs such as health and finding employment, a win for them and the greater economy.