Medicaid for inmates.

• Author: Tobler, Laura
• Position: TRENDS & TRANSITIONS

Medicaid can save states millions of dollars. Really!

A little-known federal rule, adopted in 1997, allows Medicaid a jointly funded state-federal health program--to cover some prisoners' health care costs previously paid by state funds. To be eligible, inmates must be admitted to inpatient facilities--hospitals, nursing homes, intermediate care or juvenile psychiatric hospitals--for more than 24 hours and they must meet the eligibility criteria of the state's Medicaid program. This rule changes the 1965 law, which dropped Medicaid for anyone entering a state prison or mental health institution, local jail or juvenile detention center.

"At first glance, it's a hard policy to sell," says Donna Strugar-Fritsch, a consultant with Health Management Associates, because it can be complicated to set up and "everyone assumes that the Medicaid budget will increase." The portion of the inmate's medical costs not paid by the federal Medicaid share, however, is covered by the state's corrections department or by the county, depending on whether it's a state- or county-run facility. As a result, there is no additional cost to the state's share of Medicaid.

The complexity in setting up the program may well be worth it, especially if the population covered by Medicaid expands in 2014 under federal health reform to all Americans with incomes up to 133 percent of federal poverty guidelines.

Since prisoners' incomes tend to be below that mark, nearly all inpatient health care could be covered by Medicaid. Most of...