NPR aired a story Monday morning reporting that New York has allocated $260 million in State Medicaid funds for supportive housing and exploring the question of whether housing counts as health care. Right now, Medicaid and Medicare dollars can only rarely be used for housing costs. However, the housing-as-health-care camp supports using health care dollars to pay for housing costs more frequently for high need individuals – either to pay rent or to support construction costs. Some people consume so many Medicaid or Medicare dollars through emergency room visits and hospital stays, that paying for an apartment and access to supportive services actually saves money over time. NPR shared the story of a woman who had suffered brain damage and eventually became homeless. The cost of her housing with supportive services is less than estimates of annual expenditures for severely mentally ill homeless people. The same argument can be true with the frail elderly – delaying admission to a nursing home by providing access to less intensive services can save state governments significant dollars. The challenges to developing and maintaining these programs are many. One issue is finding the neediest people who can benefit from the combination of housing and supportive services, especially if there is high turnover. Another challenge is that states must create waivers to permit the use of health care dollars for housing costs. Sometimes it is easiest (but still not easy!) to develop a service delivery site alongside the affordable housing. There are enormous potential savings in health care costs available through the stabilizing effects of housing. More states, in addition to New York, should examine potential savings through using health care dollars for supportive housing.