Medicaid: Information on Inmate Eligibility and Federal Costs for Allowable Services

What GAO Found

In 2013, the Medicaid program financed health care services for more than 72 million individuals, and an additional 7 million beneficiaries are expected to enroll in 2014 as a result of states choosing to expand Medicaid eligibility as allowed under the Patient Protection and Affordable Care Act (PPACA). Most of these newly eligible individuals will be low-income adults, a population that may include individuals who are inmates in state prisons and local jails. In the 27 states that opted to expand Medicaid eligibility as allowed under PPACA, the majority of inmates are likely to have incomes that would qualify them for Medicaid—a circumstance that did not generally exist before 2014, since Medicaid eligibility for adults has generally been limited to certain categories of low-income individuals, such as pregnant women and individuals who are aged or disabled. For example,

• officials from New York and Colorado—two states that expanded Medicaid—estimated that 80 percent and 90 percent of state prison inmates, respectively, were likely eligible for Medicaid; an

• officials in North Carolina, a state that did not expand Medicaid, estimated that 2 percent of inmates are likely eligible at any given time.

Although the expansion allowed under PPACA will result in increased eligibility among inmates, federal law prohibits states from obtaining federal Medicaid matching funds for health care services provided to inmates—except when inmates are patients in medical institutions, such as hospitals. Further, the proportion of inmates with inpatient stays that qualify for federal Medicaid funds is likely small. For example,

• inmates who were eligible for Medicaid and received allowable inpatient services ranged from 1.0 percent to 2.3 percent in 2013 in four of six states GAO contacted that could provide data on allowable services; and

• data from California and Washington indicated that—even with increases in eligibility—the percentage of inmates with allowable services may remain relatively small, less than 5 percent.

The federal matching funds obtained for allowable services provided to prison inmates were small relative to total federal Medicaid spending for inpatient services. For example, four states reported obtaining federal funds ranging from $1.3 million to $38.5 million in 2013. These funds accounted for 0.1 percent to 1.0 percent of the federal funds these states obtained for inpatient services for all beneficiaries. As of July 2014, two states were implementing efforts, such as hiring and training staff to assist with inmate enrollment in Medicaid, that could increase the amount of federal funds obtained; and the four other selected states had taken similar steps, generally prior to 2014.

The Department of Health and Human Services reviewed a draft of this report and provided technical comments, which GAO incorporated as appropriate.

Why GAO Did This Study

PPACA gives states the option to expand Medicaid eligibility to individuals with incomes up to 133 percent of the federal poverty level beginning in 2014. Most of those newly eligible will be low-income adults, a population that includes inmates. While some inmates have historically been eligible for Medicaid, the number has likely increased in the states that opted to expand Medicaid as allowed under PPACA. Federal law prohibits states from obtaining federal Medicaid matching funds for inmate health care with the exception of when inmates are patients in qualifying medical institutions--such as hospitals--for at least 24 hours. The intent of the federal prohibition is to ensure that federal Medicaid funds are not used to finance care that is the responsibility of state and local authorities.

GAO was asked to examine information on enrollment and federal Medicaid costs for inmates. This study provides information on the proportion of inmates eligible for Medicaid and state efforts to enroll inmates in Medicaid and obtain federal matching funds for allowable services. GAO collected information from six states--California, Colorado, New York, North Carolina, Pennsylvania, and Washington--that were geographically diverse and included states that expanded Medicaid as allowed under PPACA and states that did not. For these six states, GAO collected and analyzed estimates of the proportion of inmates eligible for Medicaid in 2014 and data for 2013 on inmates with inpatient stays and federal matching funds obtained by the state for allowable services. GAO also interviewed Medicaid and corrections officials from the selected states.

For more information, contact Carolyn L. Yocom at (202) 512-7114 or yocomc@gao.gov.