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.

Medicaid Section 1115 Reentry Demonstration Opportunities

CMS released guidance in April 2023 for Medicaid Section 1115 Reentry Demonstration Opportunities aimed at improving health care transitions for individuals returning to the community after incarceration. Through this demonstration project, states can apply to leverage Medicaid to provide physical and behavioral health care in corrections settings for up to 90 days before release and for pre- and post-release care management to promote individuals’ seamless transitions into the community. The guidance is designed to support state Medicaid agencies to develop applications to  address the health care needs of individuals prior to their release from correctional facilities, increasing the likelihood of successful reentry and reducing the risk of recidivism.

  • Coverage for Pre-Release Services: If approved for this opportunity, states can provide reimbursement for certain pre-release services up to 90 days before release, including required services case management, medications to treat substance use disorders (also known as medication-assisted treatment, or MAT), and a 30-day supply of all prescription medications upon release. States can choose to provide additional benefits. 
  • Target Populations: States have flexibility in defining eligible populations but are encouraged to target broadly defined groups of soon-to-be-released individuals who are Medicaid-eligible. Some states have chosen to more narrowly define to people with chronic health conditions or substance use disorders. 
  • Provider Flexibility: States can use community-based providers, in-reach providers, correctional staff, or embedded carceral health providers to deliver pre-release services. Embedded carceral health providers must comply with state Medicaid participation policies and ensure proper handoff to community-based providers.
  • Eligibility and Enrollment: States must suspend, rather than terminate, Medicaid eligibility when an individual is incarcerated. In addition, states must also establish processes to enroll individuals in Medicaid upon incarceration or at least 45 days before release. States can use presumptive eligibility for those with short incarceration periods.
  • Capacity Building and IT Support: States may request time-limited federal matching funds to develop health IT systems, train staff, and enhance operations to support the waiver’s implementation.
  • Reinvestment Requirements: States must reinvest federal matching funds received for previously funded carceral health care services into community-based health care services or other activities that enhance health care access and quality for people involved in the justice system.