Alliance Alert: The Alliance for Rights and Recovery has long called for Medicaid to advance beyond traditional medical services and begin paying for services that address the social determinants of health—housing, food, transportation, and other basics that support overall wellness, recovery, and health. Now, under New York’s Health Equity Reform (NYHER) 1115 Waiver, this vision is beginning to take shape.
This $7.5 billion demonstration program allows Medicaid to fund groceries, rent assistance, transportation, and other essential supports for enrollees. While the rollout has faced challenges, it represents one of the most ambitious efforts in the country to show that investing in social needs improves health outcomes and reduces costs.
The Alliance continues to work closely with Social Care Networks (SCNs) and state partners to ensure more people are screened and connected to the services they need. Success will depend on state agencies, providers, and local communities working together—both to improve the chances for federal renewal and, most importantly, to maximize the current funding to help more New Yorkers.
To support this effort, the Alliance will host a special panel at our Annual Conference on the 1115 NYHER Waiver. The session will explain how the waiver works, what services are available under SCNs, and how Medicaid beneficiaries and providers can get involved to expand access to critical social need services.
Unbreakable! Harnessing Our Power, Building Our Resilience, Inspiring Hope and Courage
Alliance for Rights and Recovery 43rd Annual Conference
Villa Roma Resort and Conference Center | September 29-October 1, 2025
Register Today Here!
This is a pivotal opportunity to show the nation that Medicaid can and should play a role in building healthier, more equitable communities. Let’s not waste it.
NY’s Medicaid Experiment: Groceries, Rent and Rides as Health Care
By Amanda D’Ambrosio | Crain’s New York Business | September 8, 2025
A box of fresh produce, a new air-conditioning unit and an Uber to the local farmers market aren’t typical medical benefits. But in New York, they’re now covered for Medicaid enrollees under a $7.5 billion experiment to see if addressing social needs results in cheaper health care down the line.
The pilot — known as the New York Health Equity Reform under the 1115 waiver — is backed by the federal government and aims to prove out the theory that paying for things like groceries, housing and transportation can keep patients healthier over the long term, ultimately reducing the state’s cost of covering its 7 million Medicaid members. Gov. Kathy Hochul has lauded the experiment, which came with nearly $6 billion in federal funding for social services, safety-net hospital support and workforce training, as an investment that would enhance health equity in the state. The proposition is alluring for local companies and nonprofits, too, as it unlocks new funding for providers that have not traditionally been able to tap into Medicaid dollars.
But the clock is ticking to prove the concept: Officials have less than two years before federal funding for the expansion program expires, and the rollout so far has been anything but swift. Sprawling Medicaid cuts have also created uncertainties about whether the Trump administration will continue to pay for social services when the pilot program concludes, leaving state policymakers scrambling to bring their vision to life before time runs out.
New York is not the first state to expand Medicaid to cover groceries or rent, but its proposition is one of the most ambitious — and costliest.
“The time pressure is real,” said Adam Herbst, former deputy commissioner at the state Department of Health and a partner at the law firm Sheppard Mullin. “But if it works, we’ll be setting a national precedent.”
A bumpy start
Though state officials widely celebrated the program when it earned federal approval in January 2024, there were shortcomings. The federal government put up less than half of the $13.5 billion that state officials asked for in 2022 and gave New York just three years to roll out complex technologies to collect data and pay social service nonprofits that had never been reimbursed through Medicaid before. The state has spent the past year and a half building the infrastructure and contracting with more than 100 organizations to deliver services and train community health workers.
The state has tapped nine regional organizations to evaluate the needs of Medicaid members and provide benefits to patients with serious mental illness, high rates of emergency room use and other conditions such as pregnancy who are now eligible for benefits such as cooking tools or mold and pest removal in their homes.
The evaluation process has gotten off to a slow start. Of the state’s 7 million Medicaid enrollees, just 1%, or roughly 108,000, had been screened by the end of June, data obtained by Crain’s shows. The state hopes to screen 1.8 million people by the end of March, according to the Department of Health.
Officials have chalked the delays up to the challenges of building data infrastructure and creating payment systems for organizations that have not previously been reimbursed through Medicaid.
“It’s hard to get social and health working together, and now you layer in this very precarious, high-risk environment,” Amir Bassiri, the state’s Medicaid director, told Crain’s. “We’ve tried to pivot by saying, ‘The opportunity is in front of us. Don’t waste it.’”
Tompkinsville-based Health for Youths, a small nonprofit founded in 2009 that runs young adult programs such as food pantries and college readiness workshops, is eligible for Medicaid reimbursement for the first time through the waiver. The new funding represents a vast opportunity for the organization, which has $20,000 in annual revenue and is reliant on volunteers to deliver services, said Executive Director Heather Butts. The ramp-up has been slow because the group does not have enough staff to evaluate Medicaid members and start delivering food boxes to enrollees, and it is waiting to get access to the new funding stream.
“We don’t have the capacity to ramp up in the way some other nonprofits would,” Butts said. “This is a huge game-changer for us.”
Some larger nonprofits have managed to get their systems up and running. For example, God’s Love We Deliver, a SoHo-based nonprofit, has delivered meals or grocery boxes to just under 200 individuals, said Dorella Walters, the organization’s chief program development officer.
The nonprofit, which earned $47 million in revenue last year, according to its latest tax filing, has partnered with a farm in Brooklyn to deliver fresh fruits and vegetables to Medicaid enrollees, as well as proteins like meat and eggs. The offerings go beyond meals; individuals can get free nutrition counseling to help them learn how to improve their diet as well as cooking supplies like pots and pans or even a refrigerator.
“We’ve focused so much on sickness-oriented care,” said Eric Rochman, chief strategy officer at God’s Love We Deliver. “What the waiver does is put us in a position where we can be more preventive focused and really start to shift the cost curve.”
God’s Love We Deliver is reimbursed up to nearly $150 for each weekly delivery of medically tailored meals it sends to each patient and up to $78 per week for grocery boxes, according to reimbursement guidelines from the Department of Health. That means that if the organization delivered premade meals to 200 patients a week, it could earn an estimated $120,000 each month from such meal deliveries alone. Though the organization has provided medically tailored meals for years through philanthropic dollars or smaller state-funded programs, the waiver marks the first time it can unlock Medicaid funding on a wider scale.
Forging ahead
State officials are pushing to roll out expanded Medicaid services despite uncertainty. The federal government sent a letter to states in April saying that it would not continue to fund certain Medicaid demonstrations that venture outside the scope of the health insurance program, pointing to some programs in New York that have leveraged Medicaid to cover social services.
Still, health officials are betting that the funding won’t actually come to an end. In a July presentation on the state of the Medicaid program, Bassiri said New York will work to maintain coverage of social services when it reapplies for federal approval — even if that means it must ditch terminology on health equity given the pullback on diversity, equity and inclusion efforts in Washington.
“We believe these services will continue in some way, shape or form,” Bassiri said. “We have to prove what works and what doesn’t.” New York will continue to collect data over the next 18 months in hopes of showcasing how providing the nontraditional benefits contributes to health outcomes. The state said it would measure the program’s efficacy by recording blood sugar levels among diabetes patients, unnecessary visits to the emergency room and how health care costs are shifting for enrollees.
Given the tight timeline for data collection, it will be difficult for New York to prove that paying for social services will directly affect health outcomes, said Oxiris Barbot, president and CEO of the United Hospital Fund, which is responsible for aggregating data from the state’s Medicaid pilot. But the new data and Medicaid reimbursement infrastructure that the waiver enabled New York to set up will still be useful to cover social services in the long term, she added.
“To me, yes the waiver is important, because it gives us the money to do these things,” Barbot, formerly the city’s health commissioner, told Crain’s. “But the real important thing is, what’s going to endure post-waiver that we can continue to build on?”