This expansion, particularly under the BH-CONNECT initiative, now covers items such as housing assistance and medically tailored meals for eligible beneficiaries, alongside specific provisions for physical wellness and strengths-developing activities for a targeted population.
"California found the expandable word in Medicaid: Health. Once 'health' includes housing, meals, bikes, scooters, gym memberships, art lessons, music lessons, and student loan repayment, the program stops being a safety net and becomes a vendor factory. Sacramento expands the definition. Taxpayers in the other 49 states cover the bill," stated Dutch Rojas in a recent tweet.
The CalAIM (California Advancing and Innovating Medi-Cal) initiative, launched by the Department of Health Care Services (DHCS), aims to provide a "whole-person care" approach by integrating health care with social support systems. Key components include "Community Supports" (formerly "in lieu of services") which offer housing transition navigation, housing deposits, housing tenancy and sustaining services, and medically tailored meals. These services are designed to prevent more costly medical interventions by addressing underlying social needs.
Further expansions under the BH-CONNECT initiative, which received federal approvals in March 2025, extend certain benefits to specific groups. "Activity Funds" within BH-CONNECT are designated for children and youth involved in the child welfare system who have, or are at high risk for, behavioral health conditions. These funds can cover physical wellness activities like gym memberships, bicycles, scooters, and related safety equipment, as well as strengths-developing activities such as music and art lessons. Additionally, the BH-CONNECT "Workforce Initiative" includes a Medi-Cal Behavioral Health Student Loan Repayment Program, designed to attract and retain behavioral health practitioners, not general Medi-Cal members.
CalAIM is financed through a combination of state and federal funds. The federal government contributes to Medi-Cal through the federal medical assistance percentage (FMAP), typically covering 50% of costs for most services in California. However, for certain initiatives, particularly those implemented through a Section 1115 waiver like CalAIM's Community Supports, enhanced federal matching funds can be higher, acknowledging their potential to improve health outcomes and reduce overall healthcare costs. The state also allocates significant general funds, especially for programs not eligible for federal matching. While the program aims for long-term cost savings by reducing emergency room visits and hospitalizations, its complex financing structure and long-term sustainability have drawn criticism.
