The voices of Urban Institute's researchers and staff
May 16, 2016

New Medicaid guidance could help people get much-needed health care after prison or jail

Research shows that health problems can make it harder for formerly incarcerated individuals to reintegrate into society, affecting their ability to find housing, maintain employment, and avoid reoffending. Incarcerated and newly released people have much higher physical and behavioral health needs than the general population, particularly for chronic mental health and substance abuse issues.

Providing health care coverage and services may keep communities healthier and safer by addressing the underlying health conditions that contribute to a cycle of relapse and reoffending. During National Reentry Week, the Centers for Medicare and Medicaid Services (CMS) announced new policy guidance encouraging states to enroll individuals in Medicaid and help them get coverage before and after incarceration.

These efforts will help ensure continuity of care for a population with significant health care needs and have the potential to promote better reintegration into the community. 

The ACA expands access to coverage, but getting Medicaid is complicated for those in the criminal justice system

Medicaid expansion under the Affordable Care Act (ACA) represents the first widespread opportunity to provide health care to substantial numbers of formerly incarcerated people.

Before the ACA, newly released individuals had limited options for health care coverage. Despite generally low incomes, most were ineligible for Medicaid because the program only covered children; pregnant women; parents of dependent children; and the elderly, blind, or disabled. States could not use federal funds to cover childless adults without a waiver from CMS.

In the 32 states (including the District of Columbia) that expanded Medicaid, most nonelderly adults with incomes at or below 138 percent of the federal poverty level are eligible for coverage. But for newly released individuals, there’s a catch. Like many other public assistance programs, Medicaid follows a precedent established in the Social Security Act of 1935: an “inmate exclusion” that prohibits the receipt of most program benefits while people are incarcerated, regardless of whether they are held pretrial or after conviction. States historically managed this restriction by automatically terminating Medicaid eligibility when someone was admitted to jail or prison.

Federal Medicaid policy allows incarcerated people to apply or reapply prior to release, but states often lack the infrastructure to coordinate the Medicaid eligibility determination process with prison or jail release. So, while best practice guidelines for reentry suggest lining up services before release, people who would otherwise qualify for Medicaid may be denied as “inmates of a public institution” if their applications are processed too early. This makes reentry planning and Medicaid application assistance particularly challenging for prisons and jails. 

How CMS aims to simplify the process

CMS guidance clarifies Medicaid policy around incarceration and “inmate exclusion.” In 2004, CMS encouraged states to suspend benefits for incarcerated people rather than terminate eligibility. In its latest guidance, CMS reiterated that the exclusion is a “general coverage exclusion” rather than an eligibility exclusion. In other words, while Medicaid generally cannot pay for health care benefits during incarceration, people still can be enrolled in the program.

Now CMS has gone even further, saying that states must enroll or renew the enrollment of an incarcerated person who meets all eligibility requirements. This mandatory enrollment policy has great potential to simplify reentry preparation and assistance as people transition from prisons and jails to their communities. CMS also clarified that Medicaid can pay for services for people on probation or parole and, in some cases, for people residing in government-operated halfway houses. The policy on halfway houses could help up to 96,000 individuals a year.

Numerous states and localities have launched Medicaid enrollment initiatives to promote continuity of care upon reentry. Researchers documented 64 initiatives as of January 2015, including 8 states and 32 counties that had suspended Medicaid benefits instead of terminating enrollment.

And new enrollment efforts are on the rise. During National Reentry Week, Governor Andrew Cuomo announced that New York will seek CMS approval to provide Medicaid coverage to individuals with significant physical and behavioral health needs 30 days prior to their release. Maryland is seeking federal approval to provide temporary Medicaid coverage to newly released people under a streamlined application process.

State Medicaid agencies can’t manage this process on their own. CMS encourages correctional facilities and other state, local, and tribal entities to collaborate and help with prerelease Medicaid applications. Obtaining Medicaid coverage, however, is only a first step. CMS also encourages correctional facilities to transfer medical records to community-based providers at release, and notes that federal matching funds may be available to support such activities.

As more states increase their efforts to enroll the justice-involved population in Medicaid, researchers and policymakers should assess the extent to which this coverage means better access to care, better health, and—potentially—better reintegration into families and communities.

Photo via Shutterstock

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