Medicaid and Inmates of Public Institutions

Medicaid and Inmates of Public Institutions

August 31, 2015
Medicaid and Inmates of Public Institutions
Medicaid is a means-tested entitlement program that
eligibility with respect to circumstances that may change at
finances the delivery of primary and acute medical services,
least every 12 months. For individuals whose Medicaid
as well as long-term services and supports, to eligible, low-
eligibility is based on modified adjusted gross income
income individuals. Medicaid is a joint federal-state
methods, an assessment of continued eligibility must be
program that provided health care services to an estimated
renewed every 12 months, and no more frequently than
63 million individuals at a total cost of $494 billion in
once every 12 months (as per 42 C.F.R. 435.916).
FY2014, with the federal government paying $299 billion
(about 61%) of that total. This enrollment figure represents
Traditional Medicaid state plan coverage includes a number
average monthly enrollment. It differs from ever enrolled
of both mandatory services (e.g., inpatient hospital care, lab
counts, which measure the number of people covered by
and x-ray services, physician care, nursing facility services
Medicaid for any period of time during the year. Each state
for individuals aged 21 and over) and optional benefits
designs and administers its own version of Medicaid under
(e.g., prescribed drugs, personal care services, clinic
broad federal rules. State variability is the rule rather than
services, physical therapy, and prosthetic devices).
the exception in terms of eligibility levels, covered services,
Medicaid also provides coverage in alternative benefit plans
and how those services are delivered. (For more
(ABPs) that meet the ACA essential health benefits
information about Medicaid, see CRS Report R43357,
requirements. There are 10 EHBs that include, for example,
Medicaid: An Overview.)
emergency services, hospitalization, prescribed drugs, lab
services, and pediatric services, including oral and vision
This report describes Medicaid policy with respect to
care. In general, states may enroll certain Medicaid
inmates of public institutions, including prisoners. In
beneficiaries in ABPs that include four choices: (1) the
general, no federal financial participation, meaning federal
standard Blue Cross/Blue Shield preferred provider plan
matching dollars, is available to states for medical services
under the Federal Employees Health Benefits Program; (2)
delivered to inmates of public institutions. Inmates of
a plan offered to state employees; (3) the largest
nonfederal correctional facilities are wards of the state.
commercial health maintenance organization in the state;
Thus, states—not the federal government—are responsible
and (4) other coverage appropriate for the targeted
for their care. This inmate exclusion rule delineates when
population, subject to approval by the Secretary of Health
the federal government will not share in the cost of
and Human Services.
Medicaid services and is not tied to an individual’s
Medicaid eligibility status. The federal statute
Inmates of Public Institutions
(§1905(a)(29)(A) of the Social Security Act) and the
For Medicaid purposes, an individual in a jail or prison is
implementing regulation (42 C.F.R. 435.1009) provide an
considered to be an inmate of a public institution when
exception to the prohibition on federal matching funds
certain conditions are met. While serving time for a
when a Medicaid-eligible inmate becomes an inpatient in a
criminal offense or confined involuntarily, no federal
medical institution (e.g., hospital).
matching funds are available to pay for Medicaid services
General Medicaid Eligibility and Coverage
delivered to that inmate. This exclusion applies to both
traditional Medicaid state plan coverage and coverage
Historically, to be eligible for Medicaid, a person must (1)
provided in ABPs that meet the ACA essential health
be a member of a “coverable” group (e.g., parents, children,
benefits requirements.
pregnant women, persons with disabilities, the elderly) and
(2) meet the applicable financial requirements (e.g., have
Additional federal regulations (42 C.F.R. 435.1010(a)-(b))
low income). As a result of the Patient Protection and
further specify that an inmate of a public institution means a
Affordable Care Act (ACA; P.L. 111-148, as amended) and
person who is living in a public institution. An individual is
the recent Supreme Court decision in NFIB v. Sebelius,
not considered an inmate if he or she is (1) in a public
beginning in 2014, states have the option to expand
educational or vocational training institution or (2) in a
Medicaid eligibility beyond the historical eligibility groups
public institution for a temporary period pending other
to non-elderly adults, who are not otherwise eligible for
arrangements appropriate to his or her needs. A facility is a
Medicaid, with income at or below 133% of the federal
public institution when it is under the responsibility or
poverty level, or FPL (effectively 138% of FPL, based on
administrative control of a governmental unit.
an additional 5% disregard of income).
The Government Accountability Office (GAO) recently
Similar to this ACA Medicaid expansion group, other
investigated inmate eligibility for Medicaid in response to a
Medicaid eligibility pathways also have upper income
congressional committee request. For this analysis, GAO
standards tied to a percentage of FPL (e.g., 133% of FPL
defined inmates to mean individuals incarcerated in state
applicable to pregnant women and children through the age
prisons (typically individuals sentenced to more than one
of 18). In general, states must redetermine Medicaid
year); local jails (typically individuals with a sentence of
https://crsreports.congress.gov

Medicaid and Inmates of Public Institutions
less than one year or who are awaiting adjudication); or
not incarcerated to access Medicaid services while in
facilities under contract with states or local authorities, such
custody or under extended limits of confinement.
as counties. GAO did not include federal prisoners in its
analysis because officials from the Federal Bureau of
In Rhode Island, the majority of discharged inmates with
Prisons indicated that the bureau is not enrolling prisoners
medical or behavioral health needs were eligible for
in Medicaid for purposes of obtaining federal Medicaid
Medicaid via the ACA Medicaid eligibility expansion. The
funds for inpatient services that qualify for such funds. (For
state modified its Medicaid enrollment assistance contracts
additional details, see GAO, Medicaid: Information on
to include working with the Department of Corrections
Inmate Eligibility and Federal Costs for Allowable
discharge planners.
Services, GAO-14-752R, publicly released on October 6,
2014.)
For more state-specific information, see the 2014 resources
available at the National Academy for State Health Policy
Inmates and the ACA Medicaid Expansion
(www.nashpcloud.org) website.
The ACA’s optional Medicaid eligibility expansion was
According to an analysis in the March 2014 Health Affairs
implemented by 27 states in 2014. Since 2014, four more
publication entitled “Medicaid Expansion: Considerations
states have implemented the expansion. GAO concluded
for States Regarding Newly Eligible Jail-Involved
that the majority of inmates in these states were likely to
Individuals,” states’ decisions on whether to expand
have income that would qualify them for Medicaid, a
Medicaid will have significant implications for adults
circumstance that did not generally exist prior to the
involved in the criminal justice system, particularly the 10
implementation of the ACA Medicaid eligibility expansion.
million people moving through local jails. As reported in
The implications of this analysis are twofold.
the same article, 90% of people who enter county jails have
no health insurance.
First, in these 27 states, there could be an increase in the
number of inmates in state prisons, local jails, and facilities
The ACA eligibility expansion has the potential to
under contract with states or local authorities who are
significantly increase access to care for such people when
eligible for hospital services while they are inmates in a
they are released from jail, which in turn could improve
public institution. Because more inmates in states that have
health outcomes and lower rates of recidivism. The jail-
implemented the expansion are eligible for Medicaid, the
involved population is largely male, members of a minority
percentage of inmates receiving allowable services (e.g.,
group, and poor. Such individuals also have high rates of
inpatient hospital stays) is likely to increase. However, the
mental and substance abuse problems. These individuals are
increases to federal Medicaid expenditures are likely to be
expected to comprise a substantial portion of the new ACA
limited because only a small portion (i.e., 5% or less) of all
eligibility group in states that have implemented this
inmates are likely to have inpatient stays.
enrollment pathway into Medicaid.
Second, eligibility changes made by the ACA could include
The Health Affairs article also suggests that states could
inmates once such individuals are no longer inmates.
ensure connections to needed services upon release from
Information from the National Academy for State Health
jail and could help inmates to determine their eligibility for,
Policy provides state-specific examples relevant to this
and to enroll in, the applicable state Medicaid program.
issue, three of which are summarized below.
States could also take advantage of federal grants to
automate systems that determine eligibility, and they could
In Illinois, after the Governor’s Health Care Reform
include an array of behavioral health services in their
Implementation Council was created in 2010, there was
Medicaid benefit packages. Finally, the article notes that in
early recognition of the importance of looking at the
most states, new partnerships between Medicaid and
justice-involved population independently because there
corrections agencies at both the state and local levels would
was a high volume of individuals in this population who
be needed to support these activities.
were newly eligible for Medicaid via the ACA.
In North Carolina, legislation was passed in 2010 requiring
Evelyne P. Baumrucker, Specialist in Health Care
the state’s Department of Corrections to consult with the
Financing
state’s Medicaid office to develop protocols allowing those
IF10285
prisoners who would be eligible for Medicaid if they were

https://crsreports.congress.gov

Medicaid and Inmates of Public Institutions

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress.
Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the
United States Government, are not subject to copyright protection in the United States. Any CRS Report may be
reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include
copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you
wish to copy or otherwise use copyrighted material.

https://crsreports.congress.gov | IF10285 · VERSION 5 · NEW