How the Affordable Care Act Affects Inmates

The Affordable Care Act (ACA)¹ represents an enormous opportunity to address the health needs of adults at risk for incarceration. This installment of Law and the Public's Health considers the ACA from this perspective. Following an overview of the health of the justice-involved population, the Act's key insurance elements are described, along with their implications for people at risk of incarceration, including the challenge of coordinating coverage reforms with health care during periods of incarceration.

BACKGROUND

The disproportionate rate of chronic health conditions among the justice-involved population is a matter of major public health concern.² (In this context, the justice-involved population refers to individuals incarcerated for any length of time either pre- or post-conviction and in jails and prisons.) This population disproportionately comprises residents of poor communities who experience significant health disparities. Engagement with the criminal justice system exacerbates poor health, drives recidivism, and weakens efforts to improve health outcomes.^3,4 Health care during periods of incarceration is often ineffective, a problem that is particularly acute for jail inmates, where the quality of care is often worse than in prison, and the turnover rate in jails is significantly higher than in prisons.² In general, jails are run by local governments, and inmates are often awaiting trial or serving short sentences. Prisons are run by state or federal governments together with private contractors and populated by convicted inmates serving longer sentences.

The jail- and prison-involved population experiences an exorbitantly high rate of mental illness and substance abuse disorders⁵ and significantly higher rates of infectious disease, such as human immunodeficiency virus and hepatitis C, than the general population.⁶ More than half of the jail- and prison-involved population also experiences uncontrolled chronic illnesses such as asthma or diabetes.⁷ Nearly 70% of individuals moving in and out of municipal and county jails have mental health issues, substance abuse problems, or serious physical medical conditions, often in combination. Research suggests that physical health problems equal mental health and substance use disorders in their contribution to recidivism. Care is often of questionable quality during imprisonment, and access to care is highly uncertain upon release from custody, thereby complicating reintegration into society and prospects for employment. The upshot is an elevated likelihood of criminal activity and reincarceration.⁸

OPPORTUNITIES UNDER THE ACA

The ACA presents new opportunities to increase initial and ongoing access to health care for the entire justice-involved population. Given the elevated poverty rate among the jail- and prison-involved population, the Act's nonelderly adult Medicaid expansion is of special importance. However, the U.S. Supreme Court's decision in National Federation of Independent Businesses v. Sebelius,⁹ which enabled states to opt out of the expansion, has had a significant impact. As of December 2013, 24 states had opted out; these states are disproportionately concentrated in the South, where poverty rates are especially high. More than one million adults are incarcerated in jails and prisons in these opt-out states, which are also home to almost 2.5 million people on probation or parole and vulnerable to reincarceration (Table).^10,11

Table.

Status of Medicaid Expansion decision and number of individuals incarcerated in jail and prison, on probation, and on parole, by state: U.S., 2013^a

^aSource: The Sentencing Project. Incarceration rates in the United States [cited 2013 Dec 5]. Available from: URL: http://www.sentencingproject.org/map/map.cfm#map. Data were cross-referenced with: Kaiser Family Foundation. Status of state action on the Medicaid expansion decision, as of November 22, 2013 [cited 2013 Dec 5]. Available from: URL: http://kff.org/health-reform/state-indicator/state-activity-around-expanding-medicaid-under-the-affordable-care-act

^bIndicates states where the prison and jail systems are merged and separate jail population data are not available, with the exception of Washington, D.C., where the inmate population is jail only. Approximately one-third of the incarcerated populations in these states are jail inmates.

^cAccording to the Kaiser Family Foundation, Pennsylvania and Indiana have waivers pending to expand Medicaid programs post-2014.

NA = not available

Because Medicaid's traditional adult eligibility categories focus on pregnancy, deeply impoverished parenthood, and disability, the implications of opting out of the adult Medicaid expansion are greatest for single adult men, who comprise the majority of arrestees. Incarceration rates in states implementing the expansion are approximately 20% lower than in states opting out of the expansion, although the number of people on probation and parole is similar to those in non-expansion states. Altogether, there are more than 3 million individuals involved with the criminal justice system living in Medicaid expansion states alone;¹² an estimated 35% of this population is eligible for Medicaid.¹³ Eligibility for premium subsidies and cost-sharing assistance through the health insurance Marketplace commences at 139% of the federal poverty level (FPL), although in states that opt out of the Medicaid expansion, the subsidy threshold drops to 100% of the FPL.¹⁴

Because of the Act's implications for health insurance access among adults at greatest risk for incarceration, how these expansions interact with incarceration becomes a matter of high public health importance, particularly in terms of enabling access to health interventions that can reduce the risk of incarceration. A related question is how to achieve continuity of care as populations move between incarceration and release, an especially frequent occurrence for the jail-involved population.

In all states, whether Medicaid expansion or opt-out states, active outreach and enrollment assistance through community organizations will be key to linking the at-risk population to insurance coverage. Also critical will be efforts to coordinate the rules of insurance coverage with health-care systems serving the jail- and prison-involved population. Since its 1965 enactment, Medicaid excluded payments for covered services in the case of inmates of public institutions. Under the Medicaid inmate exclusion, beneficiaries do not lose their coverage during incarceration, but all payment for otherwise-covered treatments and services ceases (although federal policy makes a limited exception for specialty care not available in jails and prisons, primarily in the form of inpatient services in a range of settings).¹⁵ The ACA does not alter this exclusion; as a result, during periods of incarceration (and at any status of incarceration), jails and prisons are solely responsible for the cost of medical care. Full coverage resumes on release, at which point payment again becomes the responsibility of the Medicaid plans in which the beneficiaries are enrolled. Although this financing arrangement traces back to Medicaid's origins, the Medicaid adult expansion will of course dramatically increase the number of people affected by this coordination challenge.

In the case of people who qualify for coverage through the health insurance Marketplace, including those who receive premium subsidies and cost-sharing assistance, status as a qualified individual actually ceases upon incarceration, with one notable exception: individuals who are incarcerated pending disposition of their cases (i.e., who are held in jail pending charges). Unlike those who are actually convicted, people held in jail or prison pending disposition do not lose their entitlement to coverage, although it is likely that their health plans will exclude payment for treatment while incarcerated similar to that found in Medicaid, as the law's insurance reforms do not bar incarceration exclusions, although state law might. If convicted and incarcerated, inmates previously covered through the Marketplace will need to reenroll in coverage once they have served their sentences. Federal regulations dictate release from incarceration as a qualifying event that allows for special insurance enrollment rights outside of the annual open enrollment period.¹⁶

KEY CONSIDERATIONS FOR STATES

In expansion states, the number of beneficiaries moving between treatment settings—jails and prisons on the one hand and Medicaid health plans on the other—can be expected to significantly increase. This increase in the number of beneficiaries creates challenges for states looking to address known public health concerns, manage Medicaid programs, reduce recidivism, and protect public safety. The ACA requires coordination between Medicaid and the Marketplace in the area of outreach and enrollment assistance to underserved populations.¹⁷ This coordination responsibility offers an important opportunity for the two premium affordability programs to develop coordination strategies that include jail and prison authorities and that reconnect former inmates to insurance coverage when they are not in custody.¹⁸ Effective coordination will mean outreach systems that can mitigate barriers such as low health literacy, substance abuse and mental health conditions, and limited willingness to seek care based on prior negative experiences with public benefit programs.¹⁹

The ACA's effort to preserve coverage for individuals covered through the Marketplace who are incarcerated pending disposition is significant given the size of the pending disposition population—61% of the U.S. jail population.²⁰ In this respect, the Marketplace rules represent a major departure from Medicaid, whose payment exclusion begins as soon as an individual is taken into custody.^21,22 Whether the pending disposition standard for Marketplace coverage will have real meaning will depend on the ability of inmate and health-care advocates to convince state insurance regulators to ensure that plans do not bar coverage and payment during this period (Personal communication, Paul Beddoe, National Association of Counties, July 2013). Data on income levels for individuals arrested and held pending disposition are scarce, but estimates indicate that about one-third of this population will be eligible for Marketplace coverage and premium subsidies.^23,24

Collaboration and innovation necessary

Individuals with access to continued medical and mental health services following release from jail and prison have significantly lower rates of recidivism. The ACA's mandatory essential health benefit provisions extend mental illness and substance use disorder treatment to both newly eligible adult Medicaid beneficiaries as well as people who enroll in qualified health plans (QHPs) sold through the Marketplace. For the nearly 13 million people who move through jails annually, the ACA offers a unique opportunity to finance treatment as people move from custody to community, and, in the case of people covered through the Marketplace, to preserve funding for treatment even when they are in custody pending disposition of their case. In light of the documented social, public health, and financial benefits associated with continuity of care for incarcerated individuals returning to the community,^25,26 assessing and meeting the challenges related to enrollment, eligibility, and access is a pressing concern. Also of importance is ensuring that state insurance regulators establish standards for QHPs sold in the Marketplace related to continuity of coverage and care for people who are incarcerated pending disposition.

Early efforts have been made in some jurisdictions to identify such opportunities. For example, in a public presentation to insurance carriers by the Delaware Health Benefit Exchange, state officials indicated a clear expectation earlier this year that issuers seeking certification as QHPs would “be expected to describe, within their QHP Application, how the plan will provide access to in-network or out-of-network providers for those enrollees who may be incarcerated but whose case is not yet fully adjudicated.”²⁷ In Nebraska, an Exchange planning quarterly report from September 2011 indicated Exchange officials “met with the members from the Nebraska Correctional System to discuss how the Exchange may interact with the correctional current health system.”²⁸ In addition, the New Jersey Department of Corrections officials have worked with Exchange officials to ensure that health plans are tailored to meet the needs of the justice-involved population. Utah similarly has made efforts to coordinate access to and payment for substance abuse services for the jail- and prison-involved population by connecting data from the state court system with health plan enrollment functions.¹² But much work remains to be done, as the issue is not addressed as part of federal QHP certification standards, and state efforts to close this gap are spotty.

The greatest opportunity for significant improvements for the segment of the jail population enrolled in health plans offered through ACA Exchanges will occur after release from detention or incarceration following conviction in the case of the Medicaid population. Because membership in Marketplace plans does not end simply as a result of detention, the problems of retriggering coverage and care that historically affected Medicaid as a result of the inmate exclusion should not apply. But even if the problems of integration are somewhat lessened by the law's effort to preserve coverage during detention, in the case of both Medicaid and Marketplace coverage, coordination between treatment received during incarceration and community care will be enormously important. The problem of coordination may be further complicated by the fact that individuals may frequently cycle across Medicaid eligibility and eligibility for premium subsidies.²⁹ This shifting eligibility means that state Medicaid agencies and insurance regulators will want to focus on aligning plan responsibilities in the case of current and former inmates so that both sources of insurance subsidies use the same coverage and payment standards to the extent possible.

IMPLICATIONS FOR PUBLIC HEALTH

Health coverage is a crucial first step in addressing the health challenges that confront the prison and jail population. In this respect, the ACA offers an enormous step forward. Medicaid expansion in all states is the critical first step, but crucial actions also include health plan standards that ensure that coverage is not prematurely terminated, as well as standards that ensure that health plans coordinate their coverage and treatment with health care received during incarceration. In all of these matters, public health plays a key role because of the importance of health care for this population as a matter of public health. Embedded in the ACA is a commitment to addressing the health needs of vulnerable populations, and developing strategies for overcoming obstacles specific to the justice-involved population is part of the significant work ahead.