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New Medicaid Options Can Help Inmates Transition out of the Justice System

Forecast ’25: Lawmakers in 2025 will also continue efforts to improve prison oversight and conditions, reduce barriers to reentry, and address the behavioral health crisis.

By NCSL Staff  |  November 11, 2024

State legislatures are creating new opportunities to leverage Medicaid for those in the criminal justice system. Lawmakers are also focusing on corrections oversight, including women in prisons and jails. Similarly, immigration continues to receive attention at the state and federal levels, and behavioral health and its interplay with the justice system remains hot.

Here’s a look at what might be in store for 2025.

NCSL Forecast ’25 

This special report from State Legislatures News covers the topics NCSL’s policy experts anticipate will occupy state lawmakers’ time in 2025 legislative sessions. Read the full report here.

Hot Topic: Reducing Barriers to Reentry: Justice-Involved Individuals and Medicaid

People who are incarcerated have higher rates of mental illness, substance use disorder, and chronic and physical health care needs than the general population and are particularly vulnerable upon release, according to the Kaiser Family Foundation. Until recently, states were prohibited from using federal funds to provide health care services to incarcerated people through the Medicaid program. But changes in federal law have created new opportunities for states to use Medicaid to provide prerelease health care services.

First, states can choose to provide limited benefits to incarcerated adults and youths up to 90 days prerelease through Section 1115 reentry waivers. Second, states are required—starting Jan. 1, 2025—to provide certain post-disposition youths and young adults with screening and diagnostic services up to 30 days prerelease. Finally, states may provide full Medicaid benefits to certain youths and young adults while they await disposition of charges. Learn more about Medicaid and prerelease options here.

ACTION: KFF reports that, as of August 2024, 11 states have received approval for Section 1115 reentry waivers, 13 states have pending waivers and at least four states have passed legislation directing state agencies to evaluate or submit reentry waivers. State Medicaid agencies are currently focused on implementing required coverage for justice-involved youth and young adults by Jan. 1, 2025, according to the National Association of Medicaid Directors.

Looking ahead, states will need to forge new connections between historically siloed state corrections, Medicaid agencies and local governments to realize the full potential of these new flexibilities and requirements. Notably, Section 1115 reentry waivers can also include capacity-building funds to help states bridge these gaps.

States will need to connect information technology systems to identify people eligible for services. States will also need to build out the health care provider network for carceral settings and plan the billing infrastructure needed to accurately claim federal funds.

NCSL Resources:

Hot Topic: Improving Corrections Oversight and Conditions

State legislatures are likely to continue to address the oversight of prisons in the next legislative session, with more than 1 million people incarcerated in state-operated correctional facilities, according to the Bureau of Justice Statistics. Legislative interest in prison oversight has remained consistent since NCSL began tracking bills on the topic in 2022.

With the goal of making federal prisons accountable for the health and safety of incarcerated people, visitors and employees, Congress passed the bipartisan Federal Prison Oversight Act. This new law creates an inspection regime for the Bureau of Prisons and requires the inspector general to conduct risk assessments of the 122 federal prisons. The inspector general must report findings to Congress, and the bureau must take corrective action within 60 days.

State lawmakers are also likely to continue work on the conditions of confinement. An area of particular focus has been women in prisons and jails, according to NCSL research. After Kentucky was the first state to pass a “dignity bill” for women in 2018, more states have followed suit. Resolutions in Hawaii adopted in 2024 requested the development of a strategy to reduce the number of incarcerated women by 25% over the next five years.

Action: Between 2022 and 2024, at least 19 states and Puerto Rico enacted or adopted 37 bills and resolutions addressing correctional oversight. In 2024, Georgia established a Senate study committee focused on supporting the safety and welfare of people in the state’s correctional facilities. Maryland created the Office of the Correctional Ombudsman. These are examples of two ways states approach prison oversight.

NCSL Resources:

Hot Topic: Integrating Immigrants and Boosting State Enforcement

Immigration continues to be a priority issue at the state and federal levels. Over the last few years, state action has focused on integration of immigrants, along with state-level immigration enforcement actions, according to NCSL research.

Colorado enacted a bill allowing for the issuance of a driver’s license or identification card to someone who is not lawfully present in the United States, and Maine established an Office of New Americans. A number of states considered legislation in 2024 similar to a Texas law (SB 4; 2023) that requires state law enforcement agencies to comply with U.S. Immigration and Customs Enforcement detainers and punishes local governments for not enforcing federal immigration laws. A court case challenging the law’s constitutionality is pending.

On the federal side, Customs and Border Protection is experiencing a drop in encounters at the southwest border compared with last year. This is in part due to President Joe Biden’s executive order, which barred migrants who crossed the border unlawfully from accessing the asylum system.

If congressional gridlock continues to block reform legislation, it’s likely executive orders and agency action will remain the strategy of choice to strengthen the ailing federal immigration system. Though the topic dominates the 2024 election discourse, Congress failed to agree on immigration reform earlier this year. The bipartisan agreement that almost passed in February, the Border Act of 2024, contained provisions that would have tightened access to the asylum system for migrants who entered the country illegally, restricted border crossings, expanded the use of alternatives to detention, decreased the immigration court backlog, and funded legal representation for some unaccompanied minors. There is continued bipartisan support on the bill, so it’s likely to return in the 119th Congress next year.

Hot Topic: Responding to the Behavioral Health Crisis

States continue to build comprehensive crisis response systems to ensure individuals have access to appropriate care and resources. States are addressing competency to stand trial and the prevalence of co-occurring substance use and mental health disorders in the criminal justice system.

Early intervention strategies attempt to route people away from the justice system to community-based services. Recent actions support the creation of crisis intervention services, including call centers, mobile response teams and stabilization centers, to provide timely care for anyone, anywhere, at any time.

Streamlining the competency restoration process, particularly in serious cases, is another priority in states. This can include expanding evaluation and in some instances jail-based restoration. States have also focused on diversion in less serious or nonviolent cases to make the best use of limited resources. Recent Colorado legislation expanded diversion (HB 24-1355; 2024) and specified (HB 24-1034; 2024) when restoration could be provided on an outpatient basis.

States also are seeking to hold individuals accountable and expand corrections-based treatment and alternatives for those already in the justice system. Legislation will likely continue to criminalize possessing, selling and trafficking fentanyl and other drug threats like the non-opioid sedative xylazine, also known as “tranq.” These actions coincide with public health approaches, including prevention, treatment and recovery options.

Congress has also funded the Justice and Mental Health Collaboration Program to increase public safety through collaboration between the behavioral health and justice systems. It encourages early intervention and diversion and includes funding for mental health courts. Additional legislation includes the Mental Health Justice Act of 2023 (HR 6451) to authorize trained mental health professionals to serve as first responders, and the Second Chance Act, up for reauthorization in 2025, to provide grants for reentry programs, including substance use disorder treatment.

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