Housing Providers Say Funds From Insurers Have Dried Up

Housing providers say Medicaid insurers are increasingly delaying or outright denying claims for short-term rent payments.

These payments, provided through a program called “flex funds,” supply crucial funding for a new crop of nonprofit and for-profit companies operating sober housing often accompanied by substance use disorder or mental health treatment. Now, the companies say, their business models are being upended by the caprices of large insurance groups that control state Medicaid spending.

At a December town hall hosted by the Oregon Health Authority, executives at three different providers testified that they’d been denied funding.

“One by one, funding streams have dried up. The final remaining source—Flex Funds through HealthShare—ceased paying invoices three months ago,” wrote Solara Salazar, director of West Coast Sober Housing. “At this juncture, we are contemplating closing two of our seven sober homes, and we are hearing similar plans from other housing organizations across the Portland metro area.”

Representatives of OHA say the agency is “aware of the issue” and is offering “additional guidance” to providers.

A HealthShare spokesperson repeatedly denied there had been any changes to the program but noted that payments tripled in 2024 and pointed to a recent memo distributed by the insurance group saying the program has had “an uptick in cases of fraud, waste, and abuse, a majority of which arise from housing support requests.”

The state is currently rolling out a new benefit for Medicaid recipients that will pay for six months’ rent, but people who are homeless are not yet eligible to receive it.