Thousands of Minnesotans who are poor, elderly or have disabilities will get more assistance staying in their own homes and avoid becoming homeless under a new program paid for by the state and federal governments.

The state Department of Human Services (DHS) announced Thursday that it received federal approval to roll out a new package of services designed to help seniors and people with disabilities — including those struggling with mental illnesses and substance use disorders — to find and maintain their own housing, and avoid costly institutional care. The new support services will start in July 2020 and will be paid for under the state-federal Medicaid insurance program.

The initiative culminates years of work by DHS and is part of a broader state effort to combat homelessness and help people with disabilities become more integrated into mainstream society. A state survey released earlier this year found that many Minnesotans with disabilities still live and work in cloistered settings, such as four-bedroom group homes, and have limited freedoms and control over their daily lives despite state efforts to break down barriers to inclusion. Many others with mental health problems cycle through hospital emergency rooms and county jails without ever finding stable housing.

"This is now the health care system taking the responsibility for the fact that people who are sick also have housing instability — and the health care system needs to step in and create that stability," said Minnesota Housing Commissioner Jennifer Ho.

The project would make Minnesota the first state in the nation to fund housing support services under its state Medicaid plan, and would help an estimated 7,600 people statewide with a broad array of services.

Those who qualify would get help finding a place to live, making sure a home is safe and ready to move in, as well as assistance negotiating leases with landlord. But unlike many short-term housing programs, the support services do not end once a person moves into a home. The program also pays for a variety of tenant services, such as early identification of behavioral problems, designed to prevent evictions. Some people would also have access to a case manager who could help develop an individualized housing plan and intervene in case of a crisis.

"It's a great idea," Sue Abderholden, executive director of the Minnesota chapter of the National Alliance on Mental Illness, said of the new benefit. "We know that having stable, supportive housing helps people's overall health and mental health, and that being homeless makes it impossible to get better."

A trifecta of housing, affordability and services are key to helping people coming out of homelessness, said Ellen Sahli, president of the Family Housing Fund, an organization focused on housing access and affordability in the Twin Cities. She said having stability not only with housing but also housekeeping, paying your rent on time and keeping up with medication regimens are other critical components to helping this population stay housed. Using Medicaid for these services will also prevent uncertainty about future funding, a problem supportive housing programs often run into.

"It really recognizes the importance of these services for housing stability," Sahli said. "It's not enough to provide housing. Some people need a little more help to be successful, but with that support, they can be successful."

State and local agencies have been struggling to find practical solutions to a statewide housing crisis, which has disproportionately affected people with disabilities. A Wilder Research study released in March found that 64% of the state's homeless population has a serious mental illness — despite only accounting for about 5% of the adult population. More broadly, nearly 60% of homeless adults in Minnesota have a physical, mental, cognitive or other health condition that limits their daily activities, according to the Wilder study, which was based on more than 4,000 interviews with people experiencing homelessness.

The state's overall homeless population last year reached more than 10,000 people, the highest number in the nearly three decades that it has been tracked by Wilder Research. The problem has become more visible in the Twin Cities metro area, as hundreds of people sleep on light-rail cars each night, live in tents along bike paths and roads, and squeeze into already crowded emergency shelters.

Once someone ends up on the street, it becomes more difficult for social workers to help them get mental health treatment and other social services. "We know from a lot of research that services are not as effective or efficient when someone is not having their basic needs met," said Stacy Twite, interim assistant commissioner for community supports at DHS.

The new housing benefit is expected to cost the state Medicaid program about $8 million in the next fiscal year, though state officials said they expect some of this cost will be offset by a reduction in duplicative services elsewhere.