Termination of Medicaid coverage during incarceration: Set-up for failure?

Key Takeaways

What happens to Medicaid benefits when most states suspend rather than terminate Medicaid benefits? Currently, 34 states and the District of Columbia have adopted policies that suspend — rather than terminate —  an individual’s eligibility for Medicaid assistance while he or she is an inmate in a public institution, according to a survey conducted in late 2018 by the Kaiser Family Foundation. This number includes states with time-limited suspension policies, in which Medicaid benefits are suspended for a specific timeframe, usually ranging from 30 days to a year.

High rates of behavioral health and substance use

Individuals entering county jails have disproportionately high rates of chronic health conditions, infectious diseases and behavioral health disorders that include substance addictions. According to data from the National Sheriffs’ Association, it is estimated that of the 10 million individuals entering jails each year, at least half have substance use disorders — and at least half of those individuals misuse opioids.

While this population is generally not eligible for Medicaid during incarceration due to what is known as the Medicaid Inmate Exclusion Policy, suspending this coverage makes it easier for a person leaving the criminal justice system to regain health coverage, and ensures quicker access to critical mental health services, prescribed medicines and other needed care. Additionally, suspension helps provide a continuum of care for individuals leaving jails that boosts local economies, improves the health of communities and reduces the risk of mortality and recidivism for this population.

Impact of the mid-term elections and 115th Congress

The number of states that have adopted suspension policies has more than doubled in the past five years, which can be attributed in part to the expansion of Medicaid. The Affordable Care Act allowed states to have the option to expand Medicaid coverage to individuals with incomes at or below 138 percent of the federal poverty level, and has provided the opportunity to enroll more justice-involved individuals who qualify for expanded Medicaid. 

Expansion was a key issue in this past November’s midterm elections, in which voters in Nebraska, Idaho and Utah approved ballot initiatives on the issue. We anticipate seeing further expansion efforts in Maine and Kansas, where newly elected governors have promised to approve Medicaid expansion proposals while in office.

In the 115th Congress, NACo endorsed a number of bills that addressed the issue of healthcare for justice involved individuals, many of which were included in the comprehensive opioids bill:

The SUPPORT for Patients and Communities Act (Public Law No: 115-271), that was signed into law this past October.

The At Risk Youth Medicaid Protection Act (S.874), enforces suspension over termination for juveniles and requires that health care coverage under the Medicaid program be restored upon evaluation of eligibility prior to release. 

The Medicaid Reentry Act (H.R. 4005), requires the Centers for Medicare and Medicaid Services (CMS) to convene a stakeholder workgroup in order to develop best practices for states to ensure continuity of health insurance or Medicaid coverage, implement transitional measures within 30 days of an inmate’s release, and outline opportunities for states to use Medicaid demonstration waivers based on identified best practices.

As the 116th Congress begins its work, NACo will continue to advocate for legislation that would prevent states from terminating an individual’s Medicaid, CHIP and SSI enrollment, and allow for the swift reinstatement of healthcare benefits upon release.