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ObamaCare to shift costs of some prisoner health coverage from states to feds

 

ObamaCare may have its skeptics, but one group is decidedly optimistic -- prison inmates.

"At least 50 percent of the [prison] population has symptoms of mental health disorders," said Brad Brockmann, executive director of the Center for Prisoner Health and Human Rights at Brown University. "With Medicaid expansion, we have an incredible opportunity to take care of the very neediest, the very poorest while freeing up huge amounts of money within the states through not having to provide that care in correctional settings."

The Eighth Amendment guarantees adequate medical care for prisoners -- often an expensive undertaking because many battle addiction and have serious mental health issues. Currently, counties and states pay for that care. But in January, when the Affordable Care Act expands Medicaid coverage to men living below the poverty line, the cost of this care shifts to the feds.

"That's one of the reason why you're seeing a lot of Republican governors support the Medicaid expansion because for them, it's a fiscal windfall," said Avik Roy, a senior fellow with the Manhattan Institute for Policy Research. "They will be able to offload these costs to the federal government that currently they're paying for."

State and county prisoners who need acute care outside a prison facility can also have that cost reimbursed by Medicaid.

"That's a substantial savings for the county and local system," Brockmann said.

Consider the projected savings in California: for the 2014-2015 fiscal year, the Legislative Analyst's Office projects a federal reimbursement of more than $70 million dollars, which is more than double the $21 million in funds it received for the 2011-2012 fiscal year.

But overall, counties stand to see the biggest financial windfall. Currently, counties are responsible for inmate care. However, under Obamacare, counties will have the authority to charge insurance purchased through the state exchange for inmates awaiting trial.  

"An individual who's awaiting trial [...] would still be in the community and would be able to retain his or her benefits," Brockmann said.

To help shift the cost burden, counties and states across the country are working to make sure inmates entering and exiting their jails are signed up for coverage either through the state exchange or with expanded Medicaid.   

"That streamlining of the eligibility criteria for Medicaid makes it much easier for states and localities to offload their health care," Roy said.  

That means the cost is dispersed to all federal taxpayers -- even those in states who opted out of the Medicaid program.

"If you choose not to expand the Medicaid program, you're saving your state taxpayers a fair amount of money," Roy said, "but that means that the federal expenditures on Medicaid are going to other states."

So in essence, money from taxpayers in the states who opted out of Medicaid, like Texas, will see it go towards the care of inmates in the states that did opt in, like California.

"That's one of the moral dilemmas of the Medicaid expansion generally," Avik said. "Should taxpayers be required to spend a fair amount of money -- because this is a very expensive program -- on the costs of health care for these inmates?"

But prison advocates predict this could have long term cost savings for prison systems because treatment may reduce recidivism rates or even prevent incarceration in the first place. Brockmann cites a 2004 program in Texas that introduced community treatment and addiction programs.  The state saw a 10 percent drop in crime and a savings of $2 billion over 5 years. Brockmann theorizes there is the potential for similar outcome because some people more at risk of incarceration will receive treatment under the new state exchanges and Medicaid guidelines.

William La Jeunesse contributed to this report.