UnitedHealthcare Helps a Nonprofit in Phoenix Provide Medicaid Members with Housing and Services

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UnitedHealthcare Helps a Nonprofit in Phoenix Provide Medicaid Members with Housing and Services

As a major division of UnitedHealth Group, America’s largest for-profit healthcare company, UnitedHealthcare (UHC) provides Medicaid health plans and managed care services in 30 states plus the District of Columbia. As a for-profit Medicaid managed care organization, UHC has explored ways to build healthier communities that address the social determinants of health for its members. In Phoenix, Arizona, UHC has partnered with Chicanos Por La Causa (CPLC), a community development corporation and supportive services provider with expertise in serving the Latino community. Several of the partnership’s projects have successfully targeted residents’ social and health needs, including healthcare, nutrition services, and workforce training, which is provided at the Maryvale Community Service Center. The Maryvale neighborhood, on the western edge of the city, is also the site of another joint project. In 2016, UHC financed CPLC’s purchase of two apartment complexes, The Palms at Camelback West and The Residences at Camelback West, located within five miles of the Maryvale Community Service Center. UHC and CPLC hope that the project, which offers residents affordable housing and convenient access to services, will be a model that can be replicated.

Expanding a Successful Partnership through Affordable Housing

Although the center’s services measurably improved health and reduced emergency room visits, the two organizations observed that Maryvale’s lack of affordable housing might be a socioeconomic factor that they could address. In 2016, CPLC suggested purchasing two existing apartment complexes to provide 499 units of affordable housing. UHC, seeing the purchase as both a continued exploration of the socioeconomic factors that influence the health of its clients and an investment opportunity, extended a $22 million low-interest loan to CPLC to acquire and renovate the properties.

CPLC purchased The Palms and The Residences at Camelback West in February and April 2016, respectively. The Residences has 351 units, and The Palms, located a half-mile away, has 148 units. The properties required extensive renovation to update and upgrade the units. However, CPLC was able to invest in the most capital-intensive renovations first and then rehabilitate the units in phases to stay within its target capital expenditure and operating budget. CPLC completed all major renovations and significantly upgraded most of the units within a year while residents continued to occupy their apartments. Renovations to the units included new flooring, cabinets, countertops, kitchen appliances, windows, doors, plumbing, and lighting. Renovations at The Residences also included new roofs, laundry room and lighting upgrades, fence repairs, landscaping and parking lot improvements, and a new swimming pool. CPLC repainted the exterior of both properties and installed new signs at each site.

The 2- and 3-story buildings provide 177 studios, 296 one-bedroom units, 25 two-bedroom units, and 1 three-bedroom unit. Because UHC financed the entire project, it is not subject to the guidelines for target groups or income limits typically associated with government or philanthropic funding. Up to 100 units are set aside for UHC clients at reduced rents, and the remaining units are available to the general public at market-rate rents. UHC selects potential tenants for the set-aside units from among the members of its Medicaid plan and other health plans, giving priority to members who could benefit most: those who have experienced homelessness in the past or who frequently visit emergency departments.

Currently, all tenants in set-aside units have an income at or below 50 percent of the area median income (AMI), and most are at or below 30 percent of AMI. Referred UHC clients pay rents that are approximately 50 percent lower than market-rate rents. Rents for the market-rate units, which range from $549 to $899, are below the fair market rent for the Phoenix metropolitan area and are affordable to those earning 50 percent or more of AMI. Low-income households occupy approximately 60 percent of the market-rate units.

Both properties offer amenities that include onsite management, Spanish-speaking staff, laundry facilities, 24-hour emergency maintenance service, and security patrols at night. The Residences has gated access and covered parking. Bus stops on a major bus route are within walking distance of both apartment complexes.

Meeting the Health and Social Needs of Tenants

Healthcare navigators help UHC members living in set-aside units meet their healthcare needs, and all residents in The Residences and The Palms can access the Maryvale Community Service Center’s comprehensive services, which include primary and behavioral health care. The local office for the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) provides nutrition and health education, healthy food vouchers, and referrals to healthcare providers. The local food bank regularly provides food boxes, including ones specially prepared for households with a person living with diabetes. Employment navigators and a nonprofit organization pursuing women’s economic independence help residents find a job and thrive at work.

Private Approach of Addressing Housing for Health Improvement

UHC’s investment in The Palms and The Residences is a good example of using private resources to improve health through affordable housing and comprehensive health and social services. UHC’s and CPLC’s shared goals for the improvement of individual and community health allowed them to prioritize vulnerable individuals who can benefit from both stable housing and a wide range of social services. Because this project relied on private financing, a good return on investment is key to making this housing development model sustainable. UHC is diversifying its investment strategies to ensure that the company invests in practices that help vulnerable individuals improve their health with stable housing. Over the past decade, UHC has invested more than $300 million in low-income tax credits to support the creation of affordable housing, and the company expects to continue these investments to further this goal.