Only a dozen states have taken advantage of a long-standing option to stick the federal government with at least half the cost of hospitalizations and nursing home stays of prison inmates, reports Stateline. The other states left tens of millions of federal dollars on the table, either because they didn't know about a 1997 federal rule or they were unable to write laws and procedures to take advantage of it. States and localities have a constitutional obligation to provide adequate health care to prisoners out of their own budgets.
However, a 1997 ruling says that care provided to inmates beyond the walls of the prison qualifies for Medicaid reimbursement if the prisoner is Medicaid eligible. The federal government pays 50 percent to 84 percent of Medicaid costs. So far, only Arkansas, California, Colorado, Delaware, Louisiana, Michigan, Mississippi, Nebraska, North Carolina, Oklahoma, Pennsylvania, Washington and some scattered local governments are tapping Medicaid to pay for inpatient medical and nursing home care.