America’s Older Homeless Crisis Is a Healthcare Failure.
Older Americans are becoming homeless at a faster rate than any other age group in the country. Adults over 55 now represent roughly one in five people experiencing homelessness nationwide, and the numbers continue to rise. This trend is often framed as a housing affordability issue or a social services failure. In reality, it is the predictable result of a structural gap in federal healthcare policy.
For many older adults, homelessness begins with a medical event. A hospitalization. A fall. A surgery. A behavioral health crisis. Medicare pays for the acute care. The patient stabilizes. And then the system runs out of options.
When an older adult no longer meets inpatient criteria and does not qualify for a skilled nursing facility or inpatient rehabilitation, Medicare coverage effectively ends. The patient is medically cleared, even if they have nowhere safe to recover. Shelters are inappropriate. Housing placement is not immediate. Returning to the street or an unsafe environment leads to rapid decline, emergency department visits, and readmission.
This is not an individual failure. It is a discharge failure.
The Missing Link Between Medicare Discharge and Recovery
Medicare is designed to pay for defined medical services. It is not designed to cover short-term medical stabilization outside institutional settings. There is no Medicare benefit for recuperative care or medical respite. There is no coverage for time-limited, non-skilled step-down care when a patient is too fragile for shelter but no longer qualifies for inpatient services.
That gap has consequences.
Hospitals hold patients longer than medically necessary because there is nowhere safe to send them. Emergency departments back up. Older adults are discharged anyway when beds are needed, often into conditions that guarantee deterioration. The costs return to Medicare through avoidable readmissions and emergency care. The human cost is measured in shortened lives.
Why Medicaid Is the Only Tool That Can Close the Gap
Many older adults experiencing homelessness are dually eligible for Medicare and Medicaid, or they become Medicaid-eligible following a destabilizing health event due to poverty, disability, or spend-down. For this population, Medicaid becomes the only payer capable of covering services Medicare excludes.
That is why recuperative care exists today under Medicaid authority rather than Medicare. Not because it is housing. Because it fills a medical stabilization gap Medicare was never built to address.
States currently rely on temporary Medicaid waivers and demonstrations to fund recuperative care. These programs work, but they are unstable. States must repeatedly reapply for authority. Rules vary widely. Capacity is limited. Oversight is inconsistent. Providers cannot plan long term. Patients lose access when pilots expire.
This is not a problem of evidence. It is a problem of federal policy design.
Recuperative Care Is Healthcare Infrastructure, Not a Housing Program
Recuperative care is a short-term medical stabilization setting for individuals who are clinically appropriate to leave acute care but not appropriate for shelter, housing placement, or return to the originating setting without support. It focuses on physical recovery, behavioral health stabilization, medication adherence, and continuity of care. It is time-limited. It is medically indicated. It is not housing and it is not open-ended.
Well-run recuperative care programs operate with hard guardrails:
Length of stay capped, typically at 90 days
Admission and continued stay determined by licensed clinicians
Mandatory transition planning beginning at admission
No authority over housing placement or custody decisions
Utilization review and outcome-focused audits
These programs reduce avoidable inpatient days, lower readmissions, and create a predictable bridge between acute care and whatever comes next. They are already doing this in states across the country.
Soul Housing has spent years operating within these constraints, stabilizing medically vulnerable individuals who would otherwise cycle between hospitals and the streets. The work is not theoretical. It is operational. And it highlights the same conclusion every time. Temporary policy produces permanent failure.
Why This Must Be Federal Policy in 2026
National homelessness is rising. The population is aging. Hospital capacity remains strained. Federal policymakers are demanding accountability, standardization, and cost control in Medicaid spending.
Recuperative care meets those demands when treated as permanent healthcare infrastructure rather than a waiver experiment.
A standardized, optional Medicaid state plan benefit for time-limited recuperative care would preserve state discretion while applying consistent guardrails nationwide. It would not expand Medicaid eligibility. It would not create a housing entitlement. It would make an existing, proven approach stable, auditable, and easier to oversee.
Most importantly, it would close the discharge gap that is pushing older Americans into homelessness and early death.
The choice facing federal policymakers is not whether to invent something new. It is whether to continue pretending that this gap does not exist. In 2026, the cost of that denial is no longer abstract. It is visible in emergency rooms, on sidewalks, and in the lives cut short when recovery is treated as optional.