The Role of Medicaid in Successful Re-entry

Since 1997, states have been able to bill for Medicaid-enrolled inmates who leave prisons or jails longer than 24 hours for health treatment in a hospital or nursing facility.

That provision is an important but little-known exception to the federal prohibition on spending Medicaid funds for health services to inmates of state prisons and local jails, according to Dr. Nicole Jarrett, who spoke at September’s CSG Medicaid Leadership Policy Academy. 

Jarrett, a senior policy analyst with CSG’s Justice Center which advises states seeking to lower their corrections spending, said that exception allows states to pay the lesser state match proportion for Medicaid rather than paying the entire bill with state corrections funding. When it comes to addressing the significant cost of providing health services for a state’s prison population, Medicaid can make a big difference, Jarrett said in her presentation.

According to a recent Pew Center on the States report, states spent $7.7 billion on inmate health care in 2011. These costs are expected to increase as the inmate population becomes older and sicker. 

recent article in Modern Healthcare provided examples of states that are reporting projected and incurred cost savings by billing Medicaid where allowed:

  • California, which is projected to save up to $70 million annually;

  • Michigan, which estimated in August that shifting such health costs to Medicaid would save the state $16.8 million in 2015; and

  • Ohio, which announced in September that it saved $10.3 million in the 2014 fiscal year compared to the 2013 fiscal year because of the provision.

Jarrett told legislators attending the CSG policy academy that for inmates leaving prison or jail, “the highest risk of recidivism is in the first six months.” 

Alex Blandford, a senior policy analyst at the Justice Center, said the data indicate 30 percent of former inmates recidivate in those first six months. In addition, health risks are elevated. 

“Individuals coming out from behind the walls, face a twelvefold risk of death in the two-week period post release,” she said.

States are being encouraged to adopt policies to suspend inmates’ Medicaid enrollment rather than terminate it when they are incarcerated. When a person’s Medicaid enrollment is suspended rather than terminated, it can easily be reactivated upon release, facilitating the transition to appropriate health, behavioral health and substance use treatment services in the community. Reactivating Medicaid eligibility upon release is much easier than reapplying. 

Some locales have built a focus on Medicaid enrollment into their discharge planning process. In Cook County, Ill., for instance, discharge planners work with inmates to ensure they are enrolled in Medicaid if they are eligible. They also, according to Blandford, set up post-release appointments with providers. 

In Massachusetts, dedicated discharge planning staff works with pre-release inmates to facilitate Medicaid enrollment. Blandford said according to the Massachusetts Department of Correction, 94 percent of state prisoners returning to the community have active Medicaid upon release. 

A report released Sept. 5 by the U.S. Government Accountability Office addressed these issues. The majority of inmates in the 27 states that expanded Medicaid are likely to be Medicaid eligible, the GAO said. In the study states of New York and Colorado, state officials estimated 80 and 90 percent of inmates, respectively, are likely eligible. California estimated once the state expanded Medicaid in January, 72 percent of inmates receiving hospital care over 24 hours would qualify for Medicaid. 

The GAO report reassures Congress that, “increases in federal spending on inmate care due to Medicaid expansion are likely to be limited” from the federal perspective. Yet the report documents federal Medicaid funding brought into California, North Carolina, Pennsylvania and Washington for inpatient services the states would otherwise have paid for totaled $6.9 billion in 2013. 

Quick Medicaid re-enrollment, especially in states that have expanded Medicaid eligibility as allowed under the Affordable Care Act, can mean seamless access to treatment after release.

A “warm handoff,” according to Blandford, includes not just a connection to benefits, but also a connection to services. Medicaid eligibility is often critical to getting community services. Sometimes the warm handoff can go as far as a community service provider meeting an individual at the exit door on his or her release from incarceration. 

Blandford once worked in a community where the bus stop outside the prison was littered with service referral cards that had been discarded by people who had been released from the facility but likely didn’t have coverage to pay for these services. If there is no continuity of care upon release, Blandford said, the investments inside the prison walls may be wasted and additional costs incurred as a result of recidivism. 

Corrections and health systems share goals of public safety and public health. It makes sense, Blandford said, that resources be allocated to those with the most severe needs for health, behavioral health and substance use treatment services and those with the most severe risk of recidivism. Medicaid can be a significant resource applied to both purposes, she said. 

CSG Resources:

Other Resources:

Also in this Issue: