States lose out on millions of Medicaid dollars for inmates

Millions of federal dollars have been left unclaimed because only a dozen states have taken advantage of an option to have the federal government pay for half the cost of hospitalizations of state prisoners who are eligible for Medicaid, Stateline reports.

States and localities must provide--and pay for--adequate healthcare to prisoners. But a 1997 ruling allows for Medicaid reimbursement if the inmate is Medicaid eligible and received care outside of the prison, according to the article. The federal government will cover 50 percent to 84 percent of Medicaid costs

But most states are either unaware of the ruling or are unable to write laws and administrative processes to take advantage of it, according to Stateline. So far, only Arkansas, California, Colorado, Delaware, Louisiana, Michigan, Mississippi, Nebraska, North Carolina, Oklahoma, Pennsylvania, Washington and some scattered local governments are using Medicaid funds to cover inpatient medical and nursing home care.

These states are typically asking for Medicaid to pay for hospitalization for childbirth, nursing home care for elderly inmates, and surgery and other treatments for cancer, liver disease and other illnesses. And they are getting a big chunk of change. For example, Stateline reports almost half of the 1,449 inmates admitted to North Carolina hospitals were eligible for Medicaid. The state received $10 million in federal reimbursement for their care in 2011. California expects to receive $31 million in federal Medicaid funds this fiscal year.

The reimbursement will become more substantial when Medicaid eligibility in 22 states expands to all poor adults in accordance with the Affordable Care Act. Inmates in those states will immediately become eligible for Medicaid in January. According to Stateline, because most inmates are newly eligible, the federal government will pay 100 percent of the costs from 2014 to 2017. States will then be responsible for a portion of the costs, rising to 10 percent by 2020.

Because so much money is at stake, more states are expected to sort through the complicated maze of Medicaid rules and gain the cooperation of correction departments and local social service programs to become eligible for federal funds by 2015.

To learn more:
- read the article