CMS approves waiver to enable California to offer Medicaid coverage to incarcerated individuals

The Biden administration approved a first-of-its-kind waiver that enables California to offer Medicaid coverage for beneficiaries before they get released from prison or jail.

The Centers for Medicare & Medicaid Services (CMS) approved the Section 1115 waiver Thursday that helps connect Medicaid beneficiaries to providers before release. It is the first time Medicaid will offer coverage for those who are still in the justice system. 

“By helping these individuals access essential services and care coordination prior to release, we will also prevent gaps in care as they rejoin their communities,” said CMS Administrator Chiquita Brooks-LaSure in a statement. 

Under the waiver, a Medicaid beneficiary can get substance use treatment if they are in a jail, prison or youth correctional facility. California can also help connect the beneficiary to a community-based Medicaid provider 90 days before they get released from the justice system.

California also will boost provider payments and managed care rates for those in obstetrics, primary care and behavioral health. 

“In obstetrics alone, this represents the potential for $60 million to be invested in the health of pregnant and postpartum women by increasing access to providers and therein improving health outcomes for pregnant women,” according to a CMS release. 

Key goals of the waiver include improving the quality of care for incarcerated beneficiaries and successful reentry into the community after release. 

CMS' announcement coincides with a new Department of Health and Human Services report that showed an estimated 80% of new releases from incarceration have chronic medical, psychiatric or substance use disorder problems. 

The waiver is the latest bid by the Biden administration to expand coverage of Medicaid, including adding new enticements for states who have held out from expanding Medicaid under the Affordable Care Act. 

Congress also included a voluntary program that extends postpartum Medicaid coverage from 90 days to a year after giving birth.