Report Connecting Recently Released Prisoners to Health Care—How to Leverage Medicaid

Lacking access to health care is among the challenges faced by people released from correctional facilities. They are more likely to experience and die from infectious diseases, chronic health conditions, substance use disorders, behavioral health disorders and severe mental illness. These individuals continue to have higher risks of death and disease than the general population following release from incarceration. A study tracking data from 2000-2009 in Washington state found that former state prisoners were three times more likely to die from any cause and more than 10 times more likely to die from overdose than the general population.

Every Week Counts: The Washington study found that risk of overdose death was highest in the first week after release.

Connecting recently incarcerated individuals with health care coverage, specifically Medicaid coverage, may reduce recidivism and improve the health and outcomes of this population. Medicaid is the most common payer of services for recently incarcerated people. The percentage of individuals eligible for Medicaid upon release varies greatly by state.

MEDICAID 101: Medicaid is a publicly financed program that provides health insurance for millions of low-income Americans, including eligible low-income adults, children, pregnant women, elderly adults and people with disabilities. While the federal government provides substantial funding and oversight for Medicaid, each state manages its own Medicaid program. Federal statute establishes minimum program requirements. Within the federal program requirements, states have flexibilities to determine who to cover, what services to cover and how providers are paid.

All state Medicaid programs are required to cover certain populations including individuals below the federal poverty line who are pregnant, have disabilities or are children. States have the option to expand eligibility to larger populations such as any adult who made less than 138% of the federal poverty line.

Individuals who become incarcerated are not prohibited from enrolling in the Medicaid program and can continue to receive Medicaid services if the state permits it. However, Section 1905 of the federal Medicaid statute prohibits federal spending for services provided to “inmates of public institutions” unless the individual is admitted to an inpatient health care facility (such as a hospital or nursing home) for more than 24 hours. This is known as the Medicaid Inmate Exclusion Policy and was intended to ensure that the federal government did not assume financial responsibility for state prison costs. The Medicaid Inmate Exclusion Policy applies equally to Medicaid beneficiaries who enter jail pretrial or prison following trial and conviction.

Once an individual becomes incarcerated in jail or prison, the state can choose whether to terminate, suspend, limit the scope of benefits or maintain the individual’s full Medicaid benefits. If the incarcerated individual has partial or full Medicaid benefits and needs to be hospitalized for more than 24 hours during their incarceration, the federal government will split the bill with the state. If the individual has partial or full Medicaid benefits during their incarceration, and that individual receives any other health services covered by Medicaid during their incarceration, the state maintains full responsibility for the cost.

State Policies

States have a wide variety of Medicaid policy levers and financing strategies to connect released prisoners to Medicaid benefits and leverage the federal match for these programs. These can broadly be separated into prerelease policies and post-release policies, but states may adopt a combination of both.

Prerelease, states have taken actions to make it easier for newly released prisoners to obtain, maintain or reactivate Medicaid benefits in preparation for reentry. Historically, states terminated Medicaid benefits when an individual became incarcerated so the state would not remain responsible for the full cost of health care services provided to that individual. However, states found that termination of benefits resulted in difficulty reconnecting prisoners to Medicaid coverage after release and limited the state’s ability to receive federal funds for covered inpatient health care services for prisoners. As of 2019, 43 states suspend benefits upon entry to prison and 42 states suspend benefits upon entry to jail instead of terminating benefits.

SOURCE: Kaiser Family Foundation, States Reporting Corrections-Related Medicaid Enrollment Policies In Place for Prisons or Jails.

Some states are considering policies to ensure inmates are enrolled in Medicaid before release. Correctional facilities in Massachusetts are responsible for completing and submitting Medicaid enrollment applications on behalf of inmates before release. A dedicated unit in the state’s Medicaid agency processes the applications. The New Hampshire legislature has directed its Medicaid agency to seek federal approval to allow state and county correctional facilities to conduct eligibility determinations for incarcerated inmates.

Prerelease changes to enrollment require coordination between state and local correctional facilities, providers and the state Medicaid agency. At least 23 states have automated electronic processes to facilitate enrollment and release coordination. State legislatures may direct Medicaid agencies to seek federal funding and approval for the administrative technology and data infrastructure investments needed to streamline prerelease suspensions and enrollments. For example, California has received Section 1115 waiver approval to use federal matching funds to purchase technology and invest in staffing for inmate enrollment in Medicaid and prerelease and post-release coordination of services.

DID YOU KNOW: The federal match is the percentage of the federal government’s share of the cost of Medicaid program expenditures. States get federal matching funds for covered services, but states can also receive federal matching funds for administrative expenses, such as development of the state’s eligibility system, and maintenance and operations. 

Prerelease, states are also proactively connecting with inmates to ensure a smooth transition to providers and services upon release. These activities are sometimes referred to as “in-reach” services. Ohio initiated a Medicaid prerelease enrollment program in 2014 which provides incarcerated people with peer-to-peer Medicaid enrollment education, choice of enrollment in one of the state’s Medicaid plans and requires plans to provide prerelease care management for individuals with extensive health needs. Arizona’s Medicaid managed care plans are required to conduct prerelease care coordination, identify members with chronic and complex health needs and appoint a liaison to ensure that released individuals have immediate appointments and access to covered services after release.

Post-release, states are pursuing strategies to holistically address the health and social service needs of recently released inmates. Minnesota pays counties for care coordination, mental health, social services and supports, physical and behavioral health services, housing and other services provided to recently incarcerated individuals with mental illness or substance use disorder. Massachusetts used a different approach to minimize gaps in coverage by providing recently released people 12 months of continuous Medicaid coverage after release, regardless of changes in circumstances that may otherwise impact the individual’s eligibility.

Promising Data

States that have adopted policies to connect recently released inmates with Medicaid coverage have seen evidence that individuals are more likely to access health care services.

• One study of Wisconsin data found that its prerelease Medicaid enrollment program was associated with a 47.8% increase in connection to outpatient services within 30 days after release for individuals with a history of substance use.
• Results from Louisiana’s prerelease Medicaid enrollment program found that 98.6% of released people attended at least one outpatient visit within six months of release.

• Evaluation of Ohio’s prerelease program reported increased access to care to address unmet health needs and self-reported reductions in financial stress and risk of recidivism among beneficiaries. 

Connecting incarcerated and formerly incarcerated people to Medicaid coverage may also help state and local governments offset costs previously assumed by the criminal justice system or by its Medicaid program. Arizona reported $30 million in savings due to avoided payments to Medicaid managed care plans due to the implementation and efficiency of its suspension policies in 2015. 

Some evidence exists that Medicaid policies may also be associated with reductions in recidivism. Reductions in recidivism can have a positive effect on public safety and state budgets, as the costs of continued imprisonment and health services can be prevented and redirected towards other policy goals. A review of data from an in-reach pilot program in New Mexico with one managed care plan found that the recidivism rate for the pilot population was 10% lower than for the non-pilot population and resulted in a decrease in emergency department claims compared to the non-pilot population.

State Action to Waive the Medicaid Inmate Exclusion Policy

In 2018, Congress directed the Centers for Medicare and Medicaid Services (CMS) to issue guidance to states on how to use Medicaid demonstration waivers to connect recently released inmates to health care. CMS has not yet issued this guidance, but in the absence of federal action, states are moving forward with novel and untested demonstration waivers to waive the Medicaid Inmate Exclusion Policy and provide Medicaid coverage to incarcerated people prerelease.

At least 13 states have sought Section 1115 demonstration waivers to waive the Medicaid Inmate Exclusion Policy. Eligibility criteria, benefits coverage and the duration of prerelease coverage varies in each waiver. The Utah legislature directed its Medicaid agency to apply for a waiver to offer full Medicaid coverage to inmates with a chronic physical or behavioral health condition, mental illness or an opioid use disorder up to 30 days prerelease. New Hampshire’s waiver seeks to provide care coordination, peer supports and initial provider services to people incarcerated in state prisons with behavioral health and substance use disorders up to 45 days prerelease. CMS has not yet approved any of these waivers, but it has communicated its support for increasing prerelease services for justice-involved populations and its intent to continue to work with Arizona on this component of its Section 1115 waiver application.

New Federal Flexibility

Recent changes in federal law incorporate a new exception to the Medicaid Inmate Exclusion Policy for certain eligible juveniles and give states new flexibilities. Under the Consolidated Appropriations Act of 2023, states are now required to provide a limited set of screening, diagnostic and targeted case management benefits to children and youth in foster care who are inmates of a public institution up to 30 days prerelease. The new benefit must be included in state plans effective Jan. 1, 2026.

The new law also gives states the option to waive the Medicaid Inmate Exclusion Policy, without time limits, for children and youth in foster care who are awaiting disposition of charges. It is likely that CMS will provide states with more details about these changes in future guidance.