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Obamacare, Universities Can Help Lower Prison Health Care Costs, Report Says

A new report from the Pew Charitable Trusts recommends that states pursue Medicaid financing for prisoners' medical services through the Affordable Care Act (ACA), as well as outsourcing such care to public university medical centers to offset the soaring costs of correctional health care.

The October 2013 Pew report, titled "Managing Prison Health Care Spending," found that, after analyzing data from 44 states and adjusting for inflation, they spent a total of $6.5 billion on prisoner health care in 2008, up from $4.2 billion in 2001.

Per-prisoner health care spending grew in 35 of those states—led by New Hampshire (305% increase), Oregon (245%) and North Carolina (203%)—with a median increase of 32%. In 39 states, prison health care costs represented a larger share of total corrections budgets, increasing on average from 10% in fiscal year 2001 to 15% in FY2008.

"Health care is consuming a growing share of state budgets, and corrections departments are not immune to this trend," said Maria Schiff, director of Pew's State Health Care Spending Project. "Prison populations got larger and older during the past decade, and these factors helped drive up correctional health care spending."

Besides rising populations of state prisoners—a trend that has begun to reverse in about half the states, according to the report—Pew also blamed increasing correctional health care costs on a larger portion of the prison population being over the age of 50; the "prevalence of infectious and chronic diseases, mental illness, and substance abuse" among prisoners; and "challenges inherent" in delivering adequate health care to prisons located too far from hospitals and competent providers.

Through the ACA—also known as "Obamacare"—more prisoners are eligible for Medicaid coverage because in those states that chose to participate in the healthcare law's Medicaid expansion, virtually all prisoners earn less than 138% of the federal poverty level, and most are under age 65, the thresholds required for Medicaid eligibility.

Once covered by Medicaid, Pew reports, federal reimbursements will cover at least 50% of prisoners' inpatient hospitalization costs. And, Pew added, "Medicaid typically pays the lowest rates of any payer in a state because of its negotiating power."

Though they are few, the states that have chosen to use Medicaid through Obamacare to help pay for prison health care have quickly begun to see savings, according to the Pew report.

After reporting initial Medicaid reimbursements of $4.5 million as of December 2012, New York's state comptroller estimates as much as $20 million could be saved annually on prisoner health care going forward—"a projection that does not account for New York's 2014 ACA Medicaid expansion or enhanced match rate, which would increase the annual savings beyond the comptroller's estimate," the Pew report said.

In California, which spent $8 billion on state corrections in FY2011, Medicaid expansion to prisoners could save nearly $70 million annually, according to the state's Legislative Analyst's Office. Other states considering Medicaid expansion to prisoners include New Hampshire, Ohio and Michigan.

The Pew report also found success in lowering correctional health care costs through outsourcing care to public universities.

In New Jersey, for example, University Correctional Health Care (UCHC) was established in 2005 through an agreement between the state's Department of Corrections and Rutgers University and later expanded to cover all medical and dental health care for 24,000 prisoners at 13 adult correctional facilities, as well as juvenile offenders and parolees.

In 2008, New Jersey's correctional health expenditures, according to Pew, were $10 million below budget.

Even better, 85% of HIV-infected prisoners there who received treatment for at least six months in 2012 had undetectable levels of active HIV in their blood. Additionally, requirements for two prisoner rights lawsuits have been satisfied, and there has been a 42% reduction in prisoners' medical complaints since 2007.

Connecticut, meanwhile, employing the same cost-containment strategy through a partnership between the state's Corrections Department and the University of Connecticut (UConn) Health Center, has saved the state $28 million from FY2009 to FY2013.

"With academic institutions, there is a mission at the core of what we do," said Dr. Robert Trestman, executive director of UConn's Correctional Managed Health Care Division. "And we are also embedded in the community, which gives us a better sense of what's important in terms of continuity of care" when prisoners are released.

The Pew report also recommended that state corrections departments expand their use of electronic communications and information technology— also referred to as "telehealth"—in supporting clinical care for prisoners. More videoconferencing, especially in psychiatry, as well as exam cameras, electronic stethoscopes and other technology can improve preventive care and lower costs.

Lastly, Pew called for a nationwide expansion of laws allowing for medical or geriatric parole.

"Because of the high cost of incarcerating older prisoners with chronic and terminal illnesses," the report concluded, "medical or geriatric parole policies can achieve notable savings, even if the state retains financial responsibility for those individuals' health care costs outside prison."


Source: "Managing Prison Health Care Spending," Pew Charitable Trusts' State Health Care Spending Project, October 2013,;

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