Feds expand Medicaid coverage to most of those in halfway houses

Most inmates in halfway houses after release from prison will be eligible for Medicaid benefits under a new federal policy announced Thursday.

The change, part of a larger push by the Obama administration to help former inmates or reduce sentences, means nearly 100,000 people in halfway houses in states where they would be eligible for Medicaid should soon have access to health care, mental health and substance abuse treatment.

Health coverage can "mean life or death" for this population as they are more vulnerable to substance abuse relapse in the two weeks after incarceration, said Michael Botticelli, director of the White House Office of National Drug Control Policy.

Much of the announcement by the departments of Health and Human Services and Justice was a clarification and restatement of federal policy, which officials say many states didn't fully understand. This included that those who are on probation, parole or under home confinement are not considered incarcerated for the purposes of Medicaid coverage.

Most people involved in the justice system have been uninsured and they are far more likely to have chronic health conditions, such as diabetes and high blood pressure, and infectious disease, federal officials said. About half of those who are incarcerated have mental health and substance abuse conditions.

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Medicaid coverage was extended to the poorest of the poor in many states beginning in the fall of 2013, and 30 states plus Washington, D.C., now have this so-called Medicaid expansion. Louisiana, which has the highest incarceration rate in the country, will be the next state to expand Medicaid.

"This is a positive step toward restoring faith in the notion that a previous bad act does not make a person irredeemable," says Adrienne Wheeler, director of the Justice & Accountability Center of Louisiana. The federal action "forges a path toward healing communities that may be plagued by substance abuse, poverty, and a lack of access to justice."

Health coverage and access to treatment, however, can be two different things in the current health care environment.

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"In many communities around the country, it's way too difficult to access services," says Rebecca Farley, the National Council for Behavioral Health's senior director of policy and advocacy. "We simply need more capacity in our mental health and addiction treatment system."

In Kentucky, which is one of the hardest-hit states by drug abuse in the nation, people with Medicaid often face long waiting lists for drug treatment, and a huge shortage of facilities and programs. Painkillers and other prescription drugs are the biggest concern, but heroin also a rising problem, especially in urban areas.

In West Virginia, also mired in drug abuse issues, bureaucratic challenges of dealing with Medicaid — especially for referrals — had already prompted family physician Matthew Hahn to decide he couldn't take on any new West Virginia Medicaid patients.

Then Hahn, whose office is a few minutes over the border in Hancock, Md., got a letter Monday from the West Virginia Bureau for Medical Services warning the "significant deficit" is going to slow the processing of Medicaid claims and that it could worsen.

"Now it sounds like they're telling us we won't get paid at all," said Hahn.

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One thing that would really help prisoners after release, says Farley, would be for health care providers to be reimbursed for linking inmates to mental health and substance abuse treatment. Funding is rarely available, she says, but the 2014 Excellence in Mental Health Act will helps address some of the funding shortfalls at least in eight states.

She cites the work of Resource in Minneapolis, which has worked closely with the Hennepin County justice system to enhance coordination of care between the mental health and jail systems, enhance access to services, and improve care to reduce recidivism for people in the justice system. Resource makes sure inmates have access to Resource's mental health and addiction services when they get out of jail and make sure they have same-day access to services.

President Obama has been pushing increased clemency for felons, and earlier this month, Virginia Gov. Terry McAuliffe removed the prohibition on voting for released inmates. Other groups are pushing to "ban the box" where you have to check whether you have been convicted of crimes on job applications.

Given the 2013 Medicaid expansion, HHS' Medicaid director Vikki Wachino was asked why it took officials so long to change and clarify the policies for prisoners reentering society.

"We wanted to get the policy right," she said.

Contributing: Laura Ungar