State Medicaid stance negates inmate medical savings

Georgia’s decision against expanding Medicaid under the Affordable Care Act is costing the state a chance to save about $20 million a year on certain medical costs for prison inmates.

States that expand Medicaid eligibility can get federal money to pay for inmates who are hospitalized outside the prison for 24 hours or more. Right now, those health care costs fall completely on the state.

So far, about 25 states have used expanded Medicaid to offset inmate hospitalization costs, according to published reports.

Georgia cannot do so because it is not part of the broader Medicaid expansion, which extends the program to more residents based on income levels. The state is limited to getting federal dollars to cover two-thirds of the cost of hospitalizing only pregnant or disabled inmates, as allowed prior to the ACA.

“It’s short-sightedness by the state,” said state Sen. Vincent Fort, D-Atlanta, who has pushed for expanding Medicaid coverage.

“We have in Georgia… an older (inmate) population, a more infirmed prison population… We are subsidizing the care of inmates in other states. It’s very short-sighted for the state not to try to get all the (federal financial) resources it can.”

Brian Robinson, a spokesman for Gov. Nathan Deal, who has opposed expanding Medicaid, said the broader expansion and the inmate costs are separate issues.

Seeking federal reimbursements for inmate costs is “unrelated to discussions over expansion” of Medicaid, he said.

Deal, like several other Republican governors, has refused to expand Medicaid under the ACA. Deal said Georgia cannot afford the long-term cost of expanding the medical care program for the poor, even though the federal government would pay all or most of the bill in the early years.

Medicaid currently covers about 1.7 million low-income children, pregnant women, the elderly and disabled in Georgia. Expanding it would also cover childless adults whose incomes are 138 percent of the federal poverty level or less, adding several hundred thousand to the rolls.

In-patient hospital care for prison inmates cost Georgia taxpayers almost $20.3 million in fiscal year 2012, almost $18.7 million in 2013 and $11 million in the first six months of the current budget year, according to the Department of Corrections. If Medicaid were expanded, the federal government would return the full cost to Georgia initially, though the reimbursement rate would drop slightly in later years.

Georgia has claimed about $310,000 in Medicaid reimbursements for treatment of pregnant or disabled inmates since April 1, 2012, according to the Department of Community Health, which administers the Medicaid program in Georgia.

The allowed reimbursements apply to 163 of about 60,000 inmates, the agency said.

Prison systems in states that expanded Medicaid coverage are seeking to enroll all inmates in Medicaid so they won’t have to pay the costs of outside hospitalization.

The reason comes down to “cold hard cash,” said Donna Strugar-Fritsch, a California consultant who has helped several states set up programs. “It offsets general funds for departments of corrections.”

It also helps inmates who leave prison enrolled in Medicaid, said Eric Schultz, spokesman for the American Correctional Association. “It’s part of the re-entry process,” he said.

“It can be easily misunderstood to benefit the bad guys,” Strugar-Fritsch said. “It’s not to benefit the bad guys. It’s cost-shifting, maximizing federal revenue. Nobody is getting services they didn’t get before. Nobody is getting anything that’s not medically necessary. It’s an economic incentive. Expansion states would have no reason not to pursue it.”

A 1997 ruling by the U.S. Department of Health and Human Services allowed states to claim Medicaid reimbursement for pregnant and disabled inmates who are hospitalized, but prison systems had taken advantage of that rule only in recent years.

Strugar-Fritch said setting up programs to qualify inmates is complicated and the savings were not significant with the limited eligibility. Now, with the pool of covered prisoners much bigger, the savings are significant enough for states that have expanded Medicaid to set up a system, he said.

According to a Pew Research Center report, Ohio predicts it will save $273 million for inmate hospital care between 2014 and 2022. Michigan expects to save $250 million over 10 years.

The Pew report said California, with 130,000 inmates, expects to recoup $52 million in federal payments in only six months under the 2014 expansion rules.

Once states understand how much federal money they’re leaving on the table, “it will be just silly if they don’t” expand to get federal dollars for the cost of inmate hospital care, Strugar-Fritsch said.

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