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Emerging Constraints on CalAIM-Funded Services in Permanent Supportive Housing

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PUBLISHED ON October 15, 2026

California’s efforts to reduce chronic homelessness depend on permanent supportive housing (PSH) and the services that help residents find and keep housing. Under CalAIM, providers can bill Medi-Cal for selected housing-related services, and early evidence suggests they improve housing stability and reduce avoidable health care use.

But federal actions and state budgetary constraints are changing how that funding works in practice. Some managed care plans (MCPs) are cutting payment rates, requiring more documented contacts with residents, and denying reauthorizations. The State has also proposed capping authorization periods for these services at six months, even though stabilization typically takes longer. 

While these changes are responding to real fiscal constraints, they put the housing-health partnerships built under CalAIM at risk. For providers who depend on this funding for the supportive services that make PSH effective for people with barriers to stable housing, these changes could create significant funding gaps and lead to worse outcomes for residents.

A new Terner Center brief describes recent changes to CalAIM, how they are affecting providers’ ability to support PSH residents, and the implications for state policy.

Read the brief

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