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Flex Funds: A Quiet but Powerful Tool for Housing Stability in Medicaid

Imagine a mother of two living in a hotel, just $800 short of moving into a safe apartment. The housing is lined up. She has income. But that one-time gap, the security deposit, is all that stands in her way.

Now imagine being the partner who helps close that gap.

For Medicaid health plans, flex funds offer a practical, often underutilized tool to stabilize housing for vulnerable members. But how these funds are administered can be the difference between bureaucratic delay and life-changing impact.

They aren’t flashy. They’re not new. But used wisely, they can be transformative.

What Are Flex Funds and Why Do They Matter?

Many Medicaid contracts include a flex fund component—pools of dollars designed to remove non-clinical barriers to health. Housing needs are among the most common, and often most urgent.

Typical flex fund uses include:

• Security Deposits: One-time support to cover move-in costs such as first month’s rent, security deposit, and required fees (e.g., keys, remote, mailbox), helping members access permanent housing.
• Rental Assistance: Time-limited support to help members stay current on rent during transitional periods, such as after job loss, a health crisis, or move-in. At Upside, we always require a documented plan for sustaining rent as a matter of best practice.
• Rental Arrears: Payment of past-due rent to prevent eviction and keep members housed. This can include associated late fees when applicable, along with a plan for ongoing housing stability.

While these investments are modest, often under $2,000, their impact is outsized. A single check can prevent homelessness, hospitalizations, or months in temporary housing—ultimately supporting both individual health and system-wide cost savings.

A Member-Centered Model for Flex Fund Deployment

At Upside, we’ve built a scalable process for administering flex funds in a way that’s state-compliant, efficient, and member-first.

1. Holistic Assessment

Care guides evaluate the member’s full housing situation, ensuring that all other barriers are addressed and all available funding resources have been exhausted before funds are requested.

2. Documentation & Verification

Each request is accompanied by required documents leases, W9s, tenant ledgers, and a housing sustainability plan to ensure responsible fund use.

3. Submission & Advocacy

Requests are submitted fully packaged for review. At the same time, we advocate with landlords and property managers to align on logistics and build trust.

4. Processing & Payment

Approved payments are made directly to landlords or property managers. Standard and expedited timelines are available.

Where Flex Funds Make the Biggest Difference

• A veteran facing eviction received rental arrears support, allowing him to stay housed while securing new employment.
• A family transitioned out of hotel living into a stable apartment, thanks to a one-time security deposit payment.
• A member with a disability stabilized in a care facility, avoiding homelessness and costly hospital stays.
  

These are not extraordinary cases. They are everyday moments where flex funds fill a critical gap quietly, effectively, and with lasting impact.

Flexibility Within Guardrails

Program parameters vary by state and plan—some require specific documentation, others set funding limits or timeframes. This variation is necessary to meet state-level compliance, and we can manage those variances—while keeping the foundational model consistent and replicable.

What’s important is having the coordination and structure in place to deploy funds quickly, responsibly, and in ways that maximize impact.

Housing Stability Doesn’t Have to Be Complex

Flex funds are often already written into Medicaid contracts. The opportunity lies in using them with intention. When deployed with care, they do more than stabilize housing—they restore momentum in a person’s life. And sometimes, that’s all someone needs.

If you’re thinking about how to structure or strengthen a flex fund program, we’re always open to sharing what’s worked and what we’re still learning.