New Medicaid Flexibilities to Support Coverage for Individuals in Carceral Settings

In April of 2023, the Biden-Harris Administration and the White House Office of National Drug Control Policy issued new guidance on the use of Medicaid coverage for substance use disorders in prison settings. This change allows states to ask for federal funding for Medicaid coverage of substance use treatment up to three months ahead of someone’s release. The goals of this policy change are to ease care transitions for people needing substance use disorder treatment and enable timely Medicaid coverage for our most vulnerable populations while also aiming to improve health disparities and reentry outcomes.

Spotlight on Prison Health Disparities

One of the biggest hidden benefits to this stance by the Biden-Harris Administration is to spotlight disparities in care for incarcerated populations. As of March 2023, there are about 2 million people in prison in the United States. Black Americans have made up a disproportionate number of this population, and this disparity has only worsened since the COVID-19 pandemic. In addition to the racial disparities in incarceration rates, there are further inequities in health outcomes. For example, people in state prisons suffer from chronic health conditions at higher rates than the rest of the US population. And coverage for chronic health conditions in many carceral settings require co-payments. 

While it is estimated that an astonishing 65% of the US prison population suffers from substance use disorder, only about 632 of the roughly 5,000 US correctional facilities offer medication-assisted treatment.

Implications of the New Biden-Harris Approach

This new plan is a stark departure from previous Medicaid laws which banned coverage for incarcerated individuals, known as the inmate exclusion policy. Prior to this new guidance, states, cities, and counties often footed the bills for substance use disorder treatment for incarcerated individuals. These state authorities have argued that they cannot afford to cover comprehensive substance use disorder treatment. By participating in the program, states are alleviated of much of the cost burdens associated with substance use disorder treatment. The April 17th State Medicaid Director letter provides detailed guidance to the states on:

• providing methadone and buprenorphine for treatment while incarcerated, 
• how to suspend rather than terminate Medicaid coverage during incarceration, 
• and providing inmates with a 30-day supply of treatment upon release. 

Expanding Medicaid coverage to reach inmate populations represents an important step in improving health outcomes and working toward eliminating health disparities among our most vulnerable populations during a critical transition period.