Putting Medicaid behind bars

Tucked away in the Build Back Better Act that passed the House is a provision that would allow people who are incarcerated to receive Medicaid benefits 30 days prior to release. It would end a policy that excludes inmates from coverage — a policy that is bad for people who are incarcerated, bad for Medicaid, and needs to be abolished. 

Why are Medicaid beneficiaries taken off Medicaid when they are incarcerated? The short answer is: It was made that way. In 1965, when Medicaid was authorized, the inmate exclusion policy was established to avoid cost-shifting from local and state governments to the federal government. This policy ensures that people who are incarcerated experience discontinuity in their health care after release. Moreover, variability in state and local resources make it nearly impossible to provide oversight on standards of care in jails and prisons.

In my clinical training, I saw the consequences of the inmate exclusion policy firsthand. It was a medical mystery of a 57-year-old man with altered mental status and imbalance. He knew his name but couldn’t tell us where he was or the date. He got brain and spine imaging, and dozens of lab tests. After two weeks in the hospital, we were not any closer to a diagnosis — that is, until the hospital social worker found out he was released from jail one month prior. He was having a psychotic break after being off his psychiatric medications.

Authorizing Medicaid coverage 30 days before release can improve care coordination and avoid expensive hospitalizations for people such as my patient who are released from incarceration with a chronic illness.

Over 50 percent of people entering U.S. jails have a chronic physical health condition or infectious disease, and more than 40 percent have a mental health problem. Without health insurance, it is not surprising that the hospitalization rate for people released from incarceration is over two times higher than the general public. In Philadelphia, about 70 percent of people incarcerated in the county jail live with opioid use disorder and are over 36 times more likely to die of overdose after release compared to the general population. Medicaid’s inmate exclusion policy unjustly continues the pain and suffering of people who have served time in jails and prisons that reverberates across their families and communities.

In the absence of federal legislation, 43 states have enacted policies to suspend rather than terminate Medicaid for people who are incarcerated. These policy experiments have triggered a wave of innovation. Arizona jails participate in a data exchange program coordinated with the state’s Medicaid agency to reinstate coverage when people are released. New York and Rhode Island are piloting criminal justice health home models to serve people with chronic health conditions upon their reentry into the community. The Chicago Cook County Jail screens people for Medicaid eligibility at intake. Delaware’s Department of Corrections allows community providers to go into correctional settings to coordinate continuity of care after release. And with the strong advocacy of Dr. Bruce Herdman, chief of medical operations for the Philadelphia Prison System, the proportion of people released from the Philadelphia County Jail with Medicaid benefits has increased from 8 percent to 95 percent.

But the big innovation — abolishing Medicaid’s inmate exclusion policy — is now in the hands of the U.S. Senate. The provision, known as the Medicaid Reentry Act of 2021, was introduced during the first session of Congress of 2021 with bipartisan support. After almost a year in waiting, the opportunity to end Medicaid’s inmate exclusion is finally here.

Passing the Medicaid Reentry Act is a necessary step, but challenges remain in implementing Medicaid coverage in a broad range of correctional settings. First, there is no national standard to accredit correctional medical services that meet Medicaid standards of care. Second, correctional electronic medical record systems need to be updated, or correctional administrators will need to hire billing services to charge Medicaid for services provided during incarceration. Third, the impact of passing of the legislation may be limited in jail settings where the timing of discharge is typically not known 30 days in advance. Correctional administrators must be brought to the table as this important policy is implemented.

The time to end Medicaid’s inmate exclusion policy is now. The American criminal justice system disproportionately affects disenfranchised communities and reinforces health inequities that have been laid bare by the COVID-19 pandemic. Ensuring that people who are incarcerated receive adequate health care within jails and prisons, and have continuity of care after release from incarceration, can help ameliorate some of those health inequities.

The health care system and criminal justice system are both in dire need of reform. Where better to begin than where the two systems meet?

Daniel Teixeira da Silva, MD, is a physician, an associate fellow at the Leonard Davis Institute of Health Economics, and a postdoctoral fellow in the National Clinician Scholars Program at the University of Pennsylvania.