Individuals coming through jails and prisons are among the least healthy in the United States.  They often suffer higher rates of chronic and infectious diseases, mental illness, and substance use disorders.  According to national estimates, approximately 14.5% of men and 31% of women in jail have a serious mental illness with 65% having a substance use disorder.¹ Data collected by the International Society of Psychiatric-Mental Health Nurses (2008) reflects that between 50% and 75% of incarcerated or justice-involved youth, have mental health or substance use disorders.  Additionally, about 80% of the jail population has a chronic medical condition that has not been treated prior to incarceration.²  As a result, health care delivered in custody is often the first time (or the most consistent time) that an incarcerated person receives care.

Prison healthcare expenses continue to grow as the inmate population ages, individuals with mental illnesses are sent to jail in lieu of psychiatric hospitals, and barriers to healthcare delivery such as distance, persist. A Pew study found that 44 states spent $6.5 billion on prison health care in 2008.  States can decrease these costs by using their Medicaid programs to assist with the costs of prisoner health.  Legislatures are positioned to reduce the expenses of the criminal justice system and potentially reduce recidivism by working with their state agencies to ensure individuals who are incarcerated have access to resources.

State Solutions for Costly Healthcare Delivery

Under federal law, Medicaid funds cannot be used to pay for routine care for the incarcerated.  However, under the inmate exception,³ Medicaid reimbursement can be issued to cover at least 50% of a hospital stay that is at least 24 hours.  For inmates with long-term illnesses (e.g., cancer, HIV) or who require major surgery, it can be expensive for jails and prisons to deliver care in their facilities.  By treating inmates at hospitals instead of prisons, states can both increase the quality of care and significantly reduce state expenditures.  Mississippi, which began applying for federal reimbursements in 2009, saves about $6 million annually on inmate costs.⁴  Louisiana also saved $2.6 million in 2009 and 2010.⁵  Despite the savings, Mississippi and Louisiana join only 14 other states (Arkansas, California, Connecticut, Colorado, Delaware, Michigan, Nebraska, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, Virginia, and Washington), that use the inmate exception.  Lack of participation is due to confusion over the Medicaid rule and lack of knowledge about the exception.  However, all states can take part in these savings, which are sure to be amplified in states where the legislature has expanded Medicaid.^*  State legislatures can work with their Medicaid offices and their departments of correction to ensure resources are there to use the inmate exception.    

Since Medicaid benefits may not be used for regular health care for inmates, several states choose to terminate Medicaid eligibility, which often results in a lapse in health coverage.  Once an inmate is discharged, it can take up to three months for Medicaid offices to determine and grant eligibility.  Suspension of benefits rather than termination, allows states to use Medicaid funds to pay for eligible services.⁶  The Centers for Medicare and Medicaid Services (CMS) have issued guidance letters to states supporting the suspension of Medicaid benefits upon incarceration as opposed to terminating eligibility.  Twelve states (California, Colorado, Florida, Iowa, Maryland, Minnesota, New York, North Carolina, Ohio, Oregon, Texas and Washington) suspend coverage and then reactivate upon release. This step saves states time and money by avoiding duplicative administrative processes and also helps former inmates maintain their treatment for mental illnesses and substance use disorders.  

Medicaid Expansion: Reaching Those Who Need It

Medicaid expansion allows states and counties to take advantage of federal funds by signing up inmates for health insurance, and the anticipated savings from Medicaid enrollment are significant. Colorado and Ohio are enrolling prisoners when they require extended hospital stays.  Ohio spent $225 million in 2010 on prisoner health care alone. Inmates who are eligible to have their extended hospital stays covered by the federal government are expected to save Ohio $18 million per year.⁷  Connecticut, Kentucky, Maryland, Oregon, and Washington State pre-enroll inmates into Medicaid before their release to ensure coverage can start as soon as possible.  Iowa is also developing plans to enroll inmates in its public health insurance program before they are released.  And most notably in Cook County jail in Chicago, Illinois, enrollment has been incorporated into the intake process with over 4,000 applications being completed since January 1, 2014. As more inmates continue their treatments after release, the likelihood of reduced interactions with the criminal justice system rises.  

Bridging the healthcare gap translates into millions of dollars saved by decreasing the number of arrests^† and resources put into criminal justice proceedings.  “Local jurisdictions will have the resources and motivation to connect people to community-based behavioral health services, which can deter people from becoming repeat offenders. This is an excellent opportunity to take advantage of cross-systems collaboration between stakeholders with an overall goal of providing comprehensive, coordinated, community-oriented healthcare in correctional settings” said Mike DuBose, Chief Executive Officer of Community Oriented Correctional Health Services (COCHS), a non-profit organization that works to create partnerships between jails and community health care providers.  

Due to federal law, inmates are prohibited from purchasing private insurance on a health insurance exchange.  However, several states use outside contractors or nonprofit groups to help their departments of correction enroll their inmates in Medicaid, or enroll them in Medicaid on their behalf.  In California, the legislature passed AB 720 last year, which authorizes counties to designate entities to help jail inmates apply for Medicaid, suspends Medicaid benefits upon incarceration, and establishes that incarcerated status does not preclude eligibility determinations.  Legislation that directs agencies to collaborate around registering inmates for health coverage, or increasing funding to departments of correction to augment their enrollment process, provides exiting inmates treatment faster and enables them to tackle pressing issues of reentry such as employment, housing, and reconnecting with family.  The legislature in Vermont passed S. 295, which is part of a pretrial services bill and directs the Agency of Human Services to assist the Department of Corrections in implementing the Affordable Care Act, including Medicaid enrollment for inmates.  

Using Medicaid funds can ease the burden of states trying to maintain a balancing act between delivering health care and preserving their coffers.  Although there are monetary benefits to states using Medicaid funds, access to care holds a significant benefit to those incarcerated once released.  Receiving proper medical and behavioral care for physical and mental illnesses has great potential to reduce costly emergency room visits and harmful episodes. Increased access to healthcare for this population could go a long way towards reducing recidivism and facilitating successful re-entry into the community.  

Resources

• Centers for Medicare and Medicaid Services (CMS) is a federal agency within the United States Department of Health and Human Services (DHHS) that administers the Medicare program and works in partnership with state governments to administer Medicaid, the State Children’s Health Insurance Program (SCHIP), and health insurance portability standards.
• Community Oriented Correctional Health Services (COCHS) is a non-profit organization that works to build partnerships between jails and community health care providers. Its goal is to establish medical homes for offenders in their communities. Their objectives include:

• • Supporting changes in public policy and practice that promote access to health preventive and treatment services both in jail and in partner community institutions
  • Ensuring that local health care systems are in place to treat incarcerated populations
  • Improving the ability of jails to connect offenders with health care
  • Developing health care delivery systems that are financially viable and sustainable.