Medicaid and Corrections

Recent Medicaid guidance and legislative developments offer new opportunities for correctional leaders to leverage Medicaid to enhance outcomes for people who are incarcerated. With the passage of the SUPPORT Act, the Consolidated Appropriations Acts of 2023 and 2024, and new guidance around the Medicaid Section 1115 Reentry Demonstration Opportunity, prisons and jails have more opportunities to work with their state Medicaid agencies to support individuals not only during incarceration but also during the critical transition from incarceration to the community.

This webpage provides a curated list of resources to support correctional leaders in taking full advantage of these new opportunities.

Consolidated Appropriations Acts (CAA) of 2023 and 2024

The Consolidated Appropriations Acts (CAA) of 2023 and 2024 include significant provisions impacting Medicaid, corrections, and reentry services. Both acts introduce reforms to ensure that people transitioning from incarceration to their communities receive necessary medical and support services. These reforms help to reduce gaps in coverage and improve overall reentry outcomes.  

  • Coverage Requirements (Section 5121): The requirements mandate coverage for necessary screening, diagnostic services, and targeted case management before and after release for youth and young adults who are post-adjudication in correctional facilities and eligible for Medicaid or the Children’s Health Insurance Program (CHIP). This includes a Medicaid-eligible individual who is under 21 years of age or CHIP-eligible individual who is under 19 years of age; and an individual between the ages of 18 and 26 who is eligible for Medicaid under the mandatory former foster care children group.
  • State Medicaid and CHIP Programs are required to provide:
    • Screening and Diagnostic Services: Screening and diagnostic services in accordance with state-determined standards and the Early and Periodic Screening, Diagnostic, and Treatment requirements for Medicaid or the approved CHIP state plan, including behavioral health screenings or diagnostic services, must be provided 30 days prior to scheduled release or as soon as practicable after release.
    • Targeted Case Management: Medicaid-defined Targeted Case Management, including assessment, referrals, development of a care plan, monitoring, and follow-up for appropriate care and services in the home and community, must be provided 30 days prior to release and continue for at least 30 days after release. 
  • Youth Pending Disposition (Section 5122): States have the option to provide Medicaid or CHIP coverage for eligible young people pending disposition of charges in correctional institutions.
  • Changes go into effect January 1, 2025.

  • Suspension, Not Termination: States must suspend rather than terminate Medicaid eligibility when individuals become incarcerated. This provision mandates that states redetermine eligibility prior to release without requiring a new application. Similarly, states may suspend rather than terminate CHIP coverage for pregnant individuals. This ensures faster reinstatement of coverage upon release​ for eligible individuals.
    • Effective January 1, 2026, for all people who are incarcerated.