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The transition from incarceration to community is tricky and creates gaps in healthcare coverage.

Expanding Medicaid’s reach is key to addressing these gaps and ensuring that those released from incarceration have immediate access to coverage and care.

A session at the 2023 Medicaid Enterprise Systems Conference (MESC), titled, “The Art of the Possible,” had leaders from health systems, private consultants, and a former CMS official discussed discussed strategies to extend Medicaid’s reach to protect this population.

Policy Overview: Extending Medicaid Coverage

The 2023 Consolidated Appropriations Act and various state Medicaid waivers move closer to providing consistent coverage for those transitioning out of incarceration. While new policies help to extend access to coverage, states seek to tailor their approach to assist those transitioning from incarceration to the community.

The 2023 Consolidated Appropriations Act

Signed into law by President Biden, the 2023 Consolidated Appropriations Act includes provisions to promote healthcare access for eligible juveniles in the justice system.

The Act requires Medicaid and CHIP programs provide a limited set of screenings and case management services for youth in foster care who are inmates of a public institution. This assistance can begin up to 30 days prior to a targeted release date.

Additionally, states can provide Medicaid or CHIP coverage to youth in foster care who haven’t been convicted or had their charges disposed of yet.

While the Act is limited to juveniles in the justice system, the framework sets the stage for CMS to advance related policies that benefit both youth and adults impacted by transitions from prison into the community.

State Medicaid Waivers

CMS expanded upon health care leaders’ goals for expanding coverage to individuals leaving incarceration by issuing waiver guidance to states looking to increase care for incarcerated individuals prior to and after their release.

As of October 2023, 16 states have submitted Medicaid waivers to CMS, expanding some of the support under the 2023 Consolidated Appropriations Act to adults.

Specific objectives of the Medicaid Reentry Section 1115 Demonstration Opportunity include:

    • Funding a package of pre-release services up to 90 days prior to the individual’s release.
    • Improving coordination between correctional systems, Medicaid systems, healthcare plans, and community-based organizations.
    • Reducing use of the ER in favor of more appropriate avenues of care.
    • Promoting health in populations with lower rates of engagement with healthcare.

January 2023 marked California as the first state to be approved by CMS to provide pre-release services for individuals transitioning back to their community. This includes Medicaid coverage for substance-use treatments and connecting individuals to community-based providers prior to their release date.

Washington used the section 1115 waiver to expand the Medicaid Transformation Project 2.0 (MTP 2.0), renewing the project for five more years. The waiver will offer limited Medicaid coverage to youth and adults up to 90 days prior to release.

New initiatives include pre-release services for incarcerated individuals, such as case management and medication-assisted treatment, as well as health-related social needs (HRSN) services.

Interoperability Challenges: Understanding How Eligibility Processes Impact Medicaid Access

Approximately 80% of individuals returning to the community have chronic medical, psychiatric, or substance use disorders, underscoring the critical need for continuous coverage tailored to this population. This demographic is particularly susceptible to the negative impacts of gaps in healthcare.

Quickly determining Medicaid eligibility — especially with specific benefits offered up to 90 days prior to release — decreases the likelihood of gaps in coverage and care following an individual’s release. States have traditionally either terminated or suspended Medicaid benefits when someone was incarcerated as required by federal law and to avoid bearing unnecessary costs of coverage. Upon release, Medicaid benefits would be eligible for reinstatement.

However, both approaches have posed problems, as the termination or suspension of benefits has made it challenging for individuals to regain their Medicaid coverage after release.

Enrollment Termination Challenges

When enrollment is terminated, individuals returning to the community must go through the reapplication process for Medicaid to regain coverage.

These challenges associated with enrollment termination create a barrier to accessing healthcare coverage immediately after release, increasing the likelihood of coverage gaps or lapses in care.

Enrollment Suspension Challenges

In states where Medicaid coverage is suspended during incarceration, disjointed systems can still lead to coverage lapses during re-entry due to delays in processing and limited communication between systems. Redetermining eligibility can be especially challenging for this populations due to the frequency of short-term incarcerations, resulting in a continuous cycle of entering and exiting Medicaid.

Introducing access to a selection of Medicaid benefits prior to release adds a layer of complexity to the process. States that rely on manual eligibility verification processes will struggle to scale.

The Role of Automation in Expanding Medicaid Access for Re-entering Individuals

Medicaid agencies are actively seeking federal funding to enhance electronic, automated data-sharing systems that facilitate changes to individual eligibility. This endeavor requires collaboration between the criminal justice systems, state Medicaid agencies, and community support systems, particularly for Section 1115 waivers supporting re-entry of prisoners to achieve their full potential.

“[New] processes require leaders of corrections and health systems to come together,” states Vikki Waccino, former Director of the Center for Medicaid and CHIP Services.

For instance, California’s approved Section 1115 waiver uses federal matching funds to invest in technology and increase staffing for inmate Medicaid enrollment and prerelease/post-release service coordination.

The availability of a 90/10 match for IT initiatives related to eligibility and enrollment systems provides a significant incentive for tech-based solutions. Medicaid agencies are issuing requests for information (RFIs) to explore data sources to efficiently place individuals involved with the justice system in the appropriate coverage. Streamlining eligibility determinations involves delivering frequent batch files with eligibility information, utilizing technology and data to identify soon-to-be-released individuals and ensure accurate eligibility actions.

While there are challenges ahead, the role of Medicaid in addressing the healthcare needs of incarcerated and post-incarceration individuals is growing. Matt Salo, former head of the National Association of Medicaid Directors (NAMD), emphasizes the slow but steady growth of this opportunity for states to expand eligibility and access. He notes that expansion requires leadership, policy changes, and navigating the political landscape to create a win-win system.

For states interested in navigating these complexities, contact Josh Schultz at to discuss incarceration data services and Softheon’s Enhanced Medicaid Eligibility capabilities.