Montpelier, Vt. – The Vermont Agency of Human Services announced today that it has finalized an agreement with the federal government for authority to allow Medicaid to pay for critical housing supports for Vermonters who are experiencing or at risk of experiencing homelessness. This agreement will enhance Vermont’s available resources and options to address the state’s housing and homelessness crisis. This benefit could be available as soon as January 1, 2026.
The federal Centers for Medicare and Medicaid Services (CMS) approved an amendment to Vermont’s Global Commitment to Health (Global Commitment) 1115 demonstration waiver, which gives Vermont flexibility in how it uses its Medicaid dollars. With this approval, Vermont will have the authority to use Medicaid funds to pay for:
- Rent for up to six months for Vermonters who are experiencing homelessness and enrolled in the Permanent Supportive Housing Assistance Pilot.
- Medical respite services for up to six months for Vermonters who are experiencing or at risk of experiencing homelessness. Medical respite settings provide a safe and stable place for individuals transitioning out of institutional settings who are at risk of inpatient hospitalizations or emergency department visits to recover and receive care.
- Up to $10.9 million to build capacity among housing providers and other partners to launch these important services.
“Housing is fundamental to the well-being of all Vermonters, especially low-income families, seniors, and those with complex medical needs,” said Secretary of Human Services Jenney Samuelson. “This waiver provides us another tool in the toolbox to address the housing and health challenges faced by our most vulnerable neighbors. By integrating these supports into Medicaid services, we can ensure Vermonters have the stability they need to recover, thrive, and lead healthy lives.”
On January 1, 2025, Vermont launched the Permanent Supportive Housing program, which offers Medicaid enrollees with significant needs pre-tenancy supports, tenancy sustaining services, and community transition services, like funding for security deposits and pest eradication services. Other existing key housing initiatives include:
- The 2023 passage of the HOME Act to create more affordable housing.
- New exemptions to Act 250 for homebuilding to enhance the impacts of the HOME Act.
- The creation of the Vermont Housing Improvement Program (VHIP) and the Manufactured Home Improvement and Repair Program (MHIR) to improve and expand affordable housing and make Vermont's housing stock healthier.
- Significant state funding for grants to increase the capacity of emergency shelters, transitional housing programs for justice-involved individuals re-entering the community, Recovery Housing for individuals with SUD, and pilot planning grants for individuals with intellectual and developmental disabilities, among others.
“Stable and safe housing is fundamental for promoting better health outcomes, including improved management of chronic health conditions, enhanced mental health, and reduced hospitalizations,” said Monica Ogelby, Vermont Medicaid Director. “By extending Medicaid coverage of short-term rent and medical respite services, Vermont is taking an important step in the state’s multipronged strategy to promote housing stability.”
The flexibility offered through this agreement can take effect as soon as January 1, 2026. Medicaid is jointly funded by Vermont state dollars and the federal government. While this agreement ensures federal funding is available, state matching funds are required in order to leverage those federal dollars.
“It’s important to clarify that this waiver does not provide an alternative funding source for our current housing and shelter programs,” added Samuelson. “Under federal rules, we cannot use Medicaid funds to replace existing state funding for programs, neither can we use these funds to expand the General Assistance Emergency Housing program or similar programs. But we know that not all Vermonters experiencing homelessness have the same needs and challenges, so this program will provide us an additional option to better serve our neighbors.”
Over the coming months and years, the Agency of Human Services will collaborate with Vermonters, providers, advocates, community-based organizations, and other partners to plan for the implementation of these important housing services as part of broader efforts to support housing stability, reduce homelessness, and ultimately promote a healthier Vermont.