Recently we looked into why states terminate rather than suspend Medicaid benefits when Medicaid beneficiaries become incarcerated (see Why Do States Terminate Rather Than Suspend Inmate Medicaid Benefits?). Despite the fact that federal regulations left it open for states to suspend rather than terminate Medicaid benefits, 38 states plus the District of Columbia terminate rather than suspend inmate benefits – creating a potential gap in health care coverage when they are released. We identified four reasons that state policymakers choose the termination option:
- Confusion over federal requirements
- The administrative difficulty of accounting for their suspension in state information systems
- Desire to eliminate the possibility of incorrect billing
- Desire to eliminate the per member per month capitation expenditure for keeping the individual “on the books” (if the individual was enrolled in a managed care program)
After my briefing was published, one of our readers offered a fifth reason – states also terminate Medicaid benefits after the federal government terminates an inmate’s Supplemental Security Income (SSI) disability payments. As with other public programs, SSI benefits cannot be paid to people who are in prisons or other public institutions. In an effort to curb over-payments, Congress amended the Social Security Law in 1999 to allow the Social Security Administration (SSA) to pay cash incentives to federal, state and local correctional, and public mental health institutions when they report inmate admissions, convictions, and releases to SSA. Although Medicaid is not the focus of the SSA prisoner reporting incentive program, since SSI recipients are categorically eligible for Medicaid in most states, when SSI disability payments are terminated, state Medicaid disenrollment follows (see Compilation of the Social Security Laws: Part A—Determination of Benefits, Eligibility For And Amount Of Benefits).
Incentive payments are only made for reporting admissions (see Incentive Payments For State And Local Institutions). Amounts available are:
- $400 for inmate information received within 30 days after the individual’s date of confinement/conviction
- $200 for inmate information received after 30 days but within 90 days after the individual’s date of confinement/conviction
- No incentive payment for information received after the 91st day following the individual’s date of confinement/conviction
SSA reports that it currently has 2,300 active data exchanges with prisons. Over the five year period 2003-2008 (the latest date reported), SSA made almost 350,000 incentive payments – for a disenrolled SSI/Medicaid inmate population of 350,000 – totaling almost $130 million (see Follow-Up On The Social Security Administration’s Prisoner Incentive Payment Program).
So what is the significance of the SSA prisoner reporting incentive program? As we noted in our earlier coverage of this issue, most states already terminate Medicaid coverage upon incarceration and this will not change the numbers affected in those states. The policy creates additional disenrollments only in the 12 states which suspend rather than terminate an inmate’s Medicaid benefits while incarcerated – California, Colorado, Florida, Iowa, Maryland, Minnesota, New York, North Carolina, Ohio, Oregon, Texas, and Washington.
In all states, both income and health care benefits can be restored upon release. The time to reinstatement will vary by state. While the SSA – and most state Medicaid programs – have pre-release procedures for reapplying, it can require three-months – at a minimum – to complete processing (see For People With Serious Mental Illnesses: Finding The Key To Successful Transition From Jail Or Prison To The Community: An Explanation Of Federal Medicaid And Disability Program Rules).
The issue for justice-involved individuals, correctional facilities, and provider organizations is that this can create a gap in income support and health coverage – and receipt/delivery of needed services – upon release. Studies show that breaks in continuity of care – particularly for those with serious physical and mental health disabilities – contribute to re-incarceration (see The ROI Of Recidivism Prevention).
For a more detailed look at the issue of states terminating rather than suspending inmate Medicaid benefits, premium members can access our recent Market Intelligence Report, Which States Terminate Rather Than Suspend Inmate Medicaid Benefits?