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How Medicaid Expansion Can Lower Prison Costs, Recidivism

Expansion states are taking advantage of the chance to cover outside hospitalizations that cost their states millions, as well as the opportunity to enroll parolees in Medicaid. Studies show health care keeps them from returning to prison.

For states expanding Medicaid to childless adults, the Affordable Care Act presents an opportunity that hasn’t gained as much attention as the hobbled rollout of the law’s online marketplaces: the chance to save millions on health care in prison systems and lower the number of ex-convicts who commit new crimes. 

It’s always been the responsibility of states to provide health care within their departments of correction, but under the Affordable Care Act states that agree to expand Medicaid to everyone earning up to 138 percent of the federal poverty line can ask the feds to cover hospitalizations outside the corrections system. Technically they’ve been allowed to do that since the 1990s, but in most states the typical prisoner—a low-income but childless adult—hasn’t qualified for Medicaid. Now, more states will be taking advantage of coverage for existing prisoners as well as the hundreds of thousands up for parole every year. Backed by studies that show access to mental health, substance abuse and other services help keep former prisoners from committing crimes again, some states are taking extra steps to ensure ex-prisoners not only sign up for Medicaid but keep their appointments. 

States are eager to combat rising prison health costs driven by an aging population, logistical challenges and a high incidence of chronic diseases. In a Pew Study examining prison health costs between 2001 and 2008, per-inmate spending rose in 35 of 44 states, with 32 percent median growth. That same study cited reports from state health agencies that found Medicaid expansion would save hundreds of millions over a decade from inpatient care in outside health facilities. In Ohio, it’s $273 million between 2014 and 2022. In Michigan, it’s $250 million in the law’s first decade.  

But in addition to those savings, states are eying relief to a more intractable problem: recidivism, or the rate at which ex-offenders commit new crimes that land them back in the prison system. Studies have shown that, particularly with ex-inmates with severe mental health or substance abuse issues, immediate access to health care upon release helps reduce recidivism. A 2007 study of two counties in Florida and Washington over a two-year period linked access to Medicaid with a 16-percent reduction in the average number of subsequent lock-ups.    

Prisons release about 750,000 people each year in the U.S., according to a 2012 report from the National Governors Association that examined the impact of Medicaid expansion. Of those, 40 percent of men and 60 percent of women have mental health, substance abuse or physical health problems. Other sources put the number at 700,000 and say about half of those ex-inmates will be eligible for coverage.  But it’s not certain how many of those released will now have access to Medicaid, given the U.S. Supreme Court decision that effectively made expansion optional for states. About half have agreed to expand at this point.

That’s not to say that only expansion states can take advantage of Medicaid enrollment. Although many former prisoners may not qualify for Medicaid under income eligibility, a serious mental illness may qualify them under the disability category of the program. Oklahoma spearheaded a program in 2007 in which state workers acted as discharge agents to identify prisoners in need and ensure they were linked with services on the outside. The program led to a 17-percent increase in eligible parolees enrolled in Medicaid from prisons that were part of the pilot run. 

In Illinois, where officials say 35 percent of the newly eligible Medicaid population will be ex-inmates, the Department of Corrections is including automatic enrollment in a prison system technology upgrade. But that same NGA report advised states to directly involve themselves with maintaining access to health care services, and other states are bolstering their efforts to advise and follow-up with former prisoners. 

“In general, states haven’t been as aggressive about doing that in part because this is a relatively new phenomenon in which prison administrators see their responsibilities extend beyond the prison walls,” said Fred Osher, director of health services and systems policy at the Council of State Governments Justice Center. “There’s a recognition that reentry is the responsibility of the entire community.”

One notable exception, Osher said, is Massachusetts’ Hampden County, which has employed discharge planning, case management and continuing access to care since it started a comprehensive support system in the mid-1990s. A state that’s taking advantage of the Affordable Care Act to improve its existing system is Maryland. 

Anticipating Medicaid expansion, the state added eight nurses specializing in release planning to its prison health contract in 2012. It’s now negotiating with Maryland Health Connection, the state’s online marketplace, to hire five coordinators to help make appointments, follow up with parolees, collect data for future study and other tasks, said Tom Sullivan, head of health services and contracts at Maryland’s Department of Public Safety and Correctional Services.  

“We can’t reach every single inmate, so what we’ll do is use those nurse-release planners to screen everyone out, but they’ll refer to the coordinators anyone who has a severe mental-health need or chronic care,” he said. Sullivan said he’s worked in three different states over three decades, and he’s never seen anyone bring community health-care providers into the correctional system from an outside organization. “We’re not just doing release-planning; we’re following up after release.”

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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