Medicaid and Justice

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Virginia is among 24 states where a largely Republican majority of lawmakers voted not to accept the federal Medicaid dollars that are the financial cornerstone of President Barack Obama’s landmark Affordable Care Act.

Bypassing those Medicaid dollars renders all low-income Virginians ineligible for health insurance under the Affordable Care Act. Persons involved in the justice system are among those ineligible Virginians.

Still, for roughly a year, the Virginia Department of Corrections, has been utilizing a 1990s federal law allowing for the jointly federal- and state-funded Medicaid program to cover non-prison hospital stays of small groups of incarcerated individuals whose hospital admissions last at least 24 hours. The eligible categories are: pregnant women, those with chronic illness or a permanent disability and those aged 65 and older.

Elderly Americans, including those in prison, are the nation’s fastest growing population.

A 2013 Virginia Joint Commission on Health Care analysis estimated that having Medicaid cover the non-prison hospitalizations of those and other income-eligible Medicaid inmates will save Virginia $290 million in state tax dollars between 2014 and 2022.

This new initiative by Virginia—a few other states that opted out of the Affordable Care Act are making similar moves—may be a sign of more change ahead on the prison front, some observers contend.

It’s About the Money

Even opponents of the Affordable Care Act—also known as Obamacare—may find themselves taking more fiscally practical steps to ease the pressure on cash-strapped state budgets, notwithstanding the political divide on this issue, the observers told The Crime Report. Paring prison budgets, among others, is a path toward greater solvency.

“I believe [Obamacare’s] Medicaid expansion will continue to grow and creep into the non-[Obamacare] states … Otherwise, they end up leaving federal resources, dollars, on the table,” said Pamela Rodriguez, president of Chicago-based Treatment Alternatives for Safe Communities.

Across the country, Rodriguez’s organization trains judges, defense lawyers, prosecutors, prison and jail personnel and other criminal justice professionals on various aspects of corrections and aims to deepen their understanding of the lives of people remanded to jails and prisons.

Though she declined to name them, Rodriguez said she is aware of several currently non-Medicaid expansion states where policymakers are pondering how to implement Obamacare provisions on their home turf.

“I’m not sure they will publicly reverse themselves,” she said. “But I do believe they are now asking themselves how do to Medicaid expansion but not call it Medicaid expansion.”

She added that her agency was contracted 18 months ago to help every pre-trial detainee at Chicago’s Cook County Jail apply for Obamacare. Illinois lawmakers embraced the federal health care law.

Thus far, 95 percent of those Cook County applicants have been deemed eligible and have enrolled in Medicaid, while 5 percent didn’t qualify, Rodriguez said.

Virginia is not the only non-Obamacare state using Medicaid strictly to pay for inmate hospitalizations, Therese Brumfield, vice president of provider operations for Nashville, TN-based Corizon Health told The Crime Report.

“We’ve talked to our clients about how to move forward [under Obamacare],” said Brumfield.” At the end of the day, when you identify the amount of savings for states [taking the Medicaid option], it’s kind of difficult to say ‘no’ to that.”

Brumfield noted that her private correctional health care company is engaged in conversations with officials in states whose legislators have and have not adopted Obamacare.

Among the 24 states contracting with Corizon to work in its prisons, Kansas and Virginia are the only non-Obamacare states using Medicaid to pay for off-prison inmate hospitalizations lasting for 24 hours or more.

Iowa and Michigan—states that have embraced the Affordable Care Act—also are Corizon clients that have begun using Medicaid to underwrite non-prison hospitalizations of qualifying inmates, Brumfield said.

Nationwide, inmates enter prison with or without health care. An estimated one-fourth to one-third of those prison inmates get medical coverage from private insurers, because they can afford it.

Some inmates already are enrolled in Medicaid before they are incarcerated. Upon incarceration, some are eligible for Medicaid but not enrolled in it.

By federal edict, none of the 50 states can use Medicaid to cover inmates’ health care while those individuals are confined to a correctional facility.

States, by law, must pay medical costs incurred by inmates.

“When state prisons contract themselves for health care they are often paying pretty high rates … [that, by comparison, are] 200 percent to 300 percent of the rates paid by Medicare [government health care for the aged],” said Chris Heiss, program officer of the Hamilton, NJ-based Center for Health Care Strategies.

Heiss, formerly a private health insurer project manager, said that paying a higher premium for inmates “makes sense because you have to account for security [inside a facility].”

“At the same time,” he added. “If you can get Medicaid to pay for a service, and you get the hospital to accept Medicaid rates … using Medicaid dollars makes a lot of sense.”

In Virginia, of the 568 off-prison hospital admissions that initially appeared eligible for Medicaid coverage, 40 applications for coverage were denied, according to Myra Smith, director of health care reimbursement for the state’s Department of Corrections (DOC).

Of the remainder, 157 inmate applications were approved and 113 applications are still pending approval or disapproval. The remaining 120 of those 568 inmates were found to have financial assets exceeding the Medicaid allowance.

Each time an inmate is released from the hospital and returns to prison, her office, which has one other staffer, must review whether that inmate still qualifies to have a non-prison hospital covered by Medicaid. Among other eligibility rules, inmates qualifying for Medicaid can have no more than $2,000 in a bank account.

Virginia is still calculating the savings derived from those admissions, which represent a fraction of inmates in that 30,000-inmate correctional system, Smith said.

Rising Costs

The bid to whittle correctional health care spending by using Medicaid to cover some off-prison hospital costs comes as recent spending on correctional health care for all inmates in Virginia has risen.

In the fiscal year ending in June 2010, for example, the yearly tab was roughly $110 million. In the fiscal year ending in June 2013, costs were roughly $165 million.

Spending on inmate health care consumed 12.9 percent of the state’s total corrections budget in fiscal year 2007-2008 and 14.6 percent in fiscal year 2012-2013.

As it paved the way for Medicaid to pay the costs of hospitalizing inmates away from prisons, Virginia lawmakers trimmed $2.7 million from the current fiscal year’s correctional department budget, Smith said. Half that amount went to the state’s Medicaid office, and the other half to an array of other state agencies.

The savings are “a benefit to the commonwealth [state] as a whole, not necessarily” corrections exclusively, said Fred Schilling, health services director for the Virginia DOC.

Former Virginia Gov. Bob McDonnell, a Republican, initiated the state’s current use of Medicaid funds for inmate hospitalizations.

The current governor, Terry McAuliffe, is pushing lawmakers to make Virginia a full-out Obamacare Medicaid-expansion state.

The Center for Health Care Strategies’ Heiss said he was “very optimistic” that the states which have not opted for Medicaid expansion will eventually do so because of the financial pressures they face.

“This is one of those major cost issues,” he said.

“It took Arizona 20 years to [allow its residents’ access] to Medicare … At some point, states will realize ‘We’re sending our tax dollars elsewhere'” and choose not to do that anymore.

Freelance journalist Katti Gray covers health, criminal justice, higher education and other topics for a range of national and regional magazines, newspapers and online news sites. A contributing editor at The Crime Report, she welcomes comments from readers.

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