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States Look to Nursing Homes to Lower Prison Health Care Costs

Some states are seeking to send their sickest inmates to private facilities, allowing them to shift significant costs to the federal government. But those ideas can come with political costs.

As medical bills in prison systems rise along with the average age of inmates, states are considering once-unlikely alternatives to the prison health ward for their sickest convicts and parolees: private nursing homes.  

While many states have special programs within their correctional systems for prisoners with severe health needs, few have partnered with outside facilities, which allows a state to save money through Medicaid and Medicare. States can apply for reimbursements through those health programs for inmates who need health services in facilities outside the prison system, effectively shifting significant costs to the federal government. 

Connecticut opened its first nursing home with a private contractor last May, though California has been sending parolees to nursing homes since 2010. Most recently, a top-ranking Republican lawmaker from Michigan is exploring legislation to do the same, underscoring the drive to find new solutions among constituencies that have long avoided policies that could be portrayed as soft on crime.

Those states were motivated by the same problem: Costs are rising while prisoners—in large part because of strict sentencing laws—are growing old in penitentiaries. Median growth in prison health care expenses rose 49 percent across 42 states between 2001 and 2008, when costs totaled $6.5 billion nationally, according to the Pew Charitable Trusts. At the same time, the proportion of inmates older than 55 has soared, reaching 94,800 in 2008, a tenfold increase since 1980, according to the AARP. Those inmates cost three times as much as younger, healthier prisoners, the AARP says. 

Previously, few states covered childless adults under Medicaid’s income eligibility. Under the Affordable Care Act that eligibility extends to any adult earning up to 138 percent of the poverty level in states that choose to expand the program. Fiscal reality and the Affordable Care Act will lead more states to go in Connecticut’s direction, said Robert Greifinger, a prison health care consultant and a board member with the National Health Law Program. “The real problem we have in our country is mass incarceration and our extremely high incarceration rates and term lengths, and it has finally hit policymakers that this is really expensive, and it’s particularly expensive as the prison population is aging,” he said.

Officials in Connecticut had been interested in nursing homes for sick prisoners on their way to parole for many years, but many private, for-profit operations were reluctant to take them on, said Mike Lawlor, undersecretary for criminal justice and planning in the Office of Policy and Management. In 2012, the state legislature granted the Department of Correction authority to release certain prisoners with severe medical problems who pose no danger to society. Under the law former inmates face periodic medical review and remain under Correction supervision. 

The state then submitted a request for proposal and found a company to operate a 95-bed facility. So far, 12 former inmates and 27 referrals from the Department of Mental Health and Addiction Services are using the facilities, which are open to any patient. With the facility not even one year old yet, officials say it’s too soon to count the savings from shifting costs from the state prison system to the federal government. 

“We have not reflected any savings in the budget,” said Judy Dowd, director of health and human services with the state budget office. “It’s about half full at this point. I think what we can say is obviously it’s a more appropriate level of care. Prison infirmaries weren’t deigned to do hospice care or the chronic medical conditions that nursing homes were designed to do.”

The biggest challenge so far has been local backlash. Residents of Rocky Hill, where the facility is located, have protested, filed an injunction and pushed their lawmakers to submit legislation in the General Assembly effectively authorizing the town to overrule the state. But rollout continued, and people who feared a spike in criminal activity have realized that the former prisoners in the facility aren’t physically able to lift a basketball, much less cause criminal problems for local law enforcement, he added. 

“These are inmates who could have gotten out otherwise in one of the various parole release systems, but because they were so sick you can’t release somebody from the hospital until they’ve got a discharge plan,” Lawlor said. “You’re between a rock and a hard place, because normally you’d put them in a halfway house, but you can’t because they’re in such a bad situation.” 

In Michigan, a state where the politics are far more conservative than Connecticut, a Republican lawmaker is considering legislation for a pilot program focused on 100 prisoners who cost the state more than $100,000 a year. To do that, he'd have to change Michigan's tough minimum-sentencing law, said Rep. Joe Haveman, chairman of the House Appropriations Committee. 

“I want to dispel the myth that we’re blowing up” [the law], he said. “I would be looking to cut out a minor slice of it to accommodate a small population.”

Chris covers health care for GOVERNING. An Ohio native with an interest in education, he set out for New Orleans with Teach For America after finishing a degree at Ohio University’s E.W. Scripps School of Journalism. He later covered government and politics at the Savannah Morning News and its South Carolina paper. He most recently covered North Carolina’s 2013 legislative session for the Associated Press.
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