REFORM (VT)- Vermont officials seek Medicaid benefits for incarcerated people, but federal approval could be a long time coming

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[MM Curator Summary]: VT’s submission of its “Global Commitment to Health” waiver adds it to the list of 14 states trying to get federal funding to turn Medicaid on before inmates re-enter society.



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A hospital bed in the infirmary unit of Southern State Correctional Facility in December 2016. File photo by Phoebe Sheehan/VTDigger

Incarcerated people have long been ineligible for Medicaid. When the federally funded health care program began in 1965, it expressly excluded “inmate(s) of a public institution” from coverage.

In Vermont and other states, officials are now embarking on a potentially arduous, yearslong process to change that — by seeking a waiver from the federal government that would allow Medicaid coverage to kick in for people in their final 90 days of incarceration. 

Prison officials and reform advocates alike say the Medicaid exclusion sometimes leads to a gap in health care coverage when people are released from prison — a vulnerable period during which they are anywhere from 10 to more than 100 times more likely than their peers to die of a drug overdose. 

“We’re very much living today with the policy decision made in the mid-1960s,” said Isaac Dayno, policy director for Vermont’s Department of Corrections. “It’s an issue that really doesn’t get enough attention.”

There’s also a potentially sizable financial benefit for the state. Vermont currently pays about $33 million per year to a private prison health contractor, Wellpath. According to 2015 data, the most recent year for which national comparisons exist, Vermont spent the second most per capita on prison health care, a Pew study found. 

Allowing Medicaid to cover incarcerated people’s medical expenses would transfer some of the financial burden of prison health care to the federal government, which, according to Dayno, could be a “paradigmatic shift.”

‘Our system is just really clunky’

While states are barred, with few exceptions, from billing Medicaid for prison health care costs, they have the option of suspending, rather than terminating, a person’s Medicaid eligibility when they enter prison. 

In theory, suspension eliminates a mountain of paperwork for people exiting prison by allowing them to access Medicaid coverage with the push of a button.

Vermont, however, lacks the IT infrastructure needed to simply suspend Medicaid eligibility.

And in practice, how — or whether — someone loses eligibility in the state is haphazard. 

More than 30% of Vermont’s prison population are people who have been detained as their cases move through the courts, rather than convicted and sentenced, state data shows. Those individuals can have their Medicaid benefits terminated even if they enter the prison system for a short time and are quickly released while awaiting trial. 

Termination may occur when a person or their family member reports they are incarcerated or when a regular check of Medicaid eligibility determines that a person is incarcerated. The corrections department, according to its health team, does not notify the Department of Vermont Health Access — the state agency responsible for Medicaid enrollment —  to “turn off” a person’s Medicaid.

When an incarcerated person approaches their release date, the Department of Corrections contacts the Department of Vermont Health Access to prepare for Medicaid enrollment, officials said.

But with unpredictable release dates, a decades-old computer system and the inevitable mistakes of a human-powered bureaucracy, eligible people sometimes exit incarceration without being enrolled in Medicaid. 

“We are not blind to a lot of the issues people face as they exit incarceration,” Dayno said. He said the process is “more seamless” in states that suspend, rather than terminate, enrollment. 

Ashley Berliner, who leads Vermont’s Medicaid policy development within the Agency of Human Services, said the state works hard to ensure people exiting state custody have coverage, using an expedited enrollment process once someone is scheduled for release.

“Our system is just really clunky,” she said, adding that enrollment is a “pretty manual process.”

Berliner called eligibility suspension the “gold standard” but said Vermont’s system “is just not capable of that functionality.”

The state is in the process of working to procure a new system. It has hired a technical advisory group and plans to release a request for proposals “for federal partner review” before the end of the year. 

‘Historically very little help’

Tim Burgess, who was previously incarcerated in Vermont and now leads the state’s chapter of Citizens United for the Rehabilitation of Errants, said he’s seen many people eligible for Medicaid leave prison without being enrolled.

“There has been historically very little help for people to transition out of the system so they do have medical coverage,” he said.

Because incarcerated people receive health care in prison, they often wrongly expect a continuity of coverage upon release, Burgess said. 

Without health coverage, recently released people may accumulate medical debt or be unable to access care, including medically assisted opioid treatment, he said, adding that Medicaid can act as a safety net and even prevent recidivism.

Burgess said he supports the variety of efforts underway to enroll incarcerated people in Medicaid, whether that means allowing coverage in the months leading up to release or ensuring reenrollment when a person returns to the community.

Will Hunter, a Windsor County advocate who rents apartments to recently incarcerated people, said their experiences with Medicaid have varied widely. 

“It does not happen automatically that the (corrections) caseworker gets a (Medicaid) application in before the person walks out the door,” he said.

Sometimes people he works with have left prison with Medicaid, Hunter said. In one instance, a former tenant on Medicaid who became incarcerated continued to have prescriptions sent to one of Hunter’s properties even while in custody. 

For people who are released without health care coverage, Hunter said he’s had good luck getting people enrolled in Medicaid over the phone, a process that can take as little as 10 to 20 minutes. That contrasts his experience with mailed applications, which he said have sometimes disappeared into a bureaucratic “black hole.”

As for Vermont’s IT struggles, Hunter felt the state shouldn’t so quickly explain away its own dysfunction.

“There’s an old saying,” he said. “A poor workman blames his tools.”

‘Back to the drawing board’  

Corrections departments nationwide support efforts to bring Medicaid into the prison system, according to Dayno — at least in part because of the potential for financial savings.

And in Congress, a bipartisan group of federal lawmakers, including U.S. Sen. Peter Welch, D-Vt., and U.S. Rep. Becca Balint, D-Vt., have thrown their support behind legislation known as the Reentry Act, which proposes restarting Medicaid benefits 30 days prior to release for people who are otherwise eligible. This would help create “uninterrupted and comprehensive coverage” upon release, according to a white paper on the bill. 

Welch called the Reentry Act a common sense way to strengthen communities, particularly amid the rise of overdose deaths

“This bill is designed to limit gaps in health care coverage for eligible people about to reenter society and has broad, bipartisan support,” he said in a statement. 

Introduced in both the House and Senate this year, the bill currently sits in committee. Rather than wait for Congress to act, some states are pursuing a different route to ensure people leave prison with health insurance. 

The federal government allows states to pursue experimental and innovative projects that would not typically be covered by Medicaid through a waiver process. Vermont’s approved waiver is the 279-page “Global Commitment to Health.”

In January, California became the first state to receive federal approval to use its waiver to cover some health expenses for incarcerated people up to 90 days prior to their scheduled release. 

Vermont is among 14 states currently seeking similar approval, according to the Kaiser Family Foundation. 

According to Berliner, the Centers for Medicare and Medicaid Services — the federal organization that administers both programs — wanted to first negotiate California’s waiver before turning to the other states seeking similar coverage of incarcerated individuals. 

Based on the Centers for Medicare and Medicaid Services’ approval of California’s waiver, Vermont officials realized “we would have to come back to the drawing board and really do some planning and design work before we went to have conversations with CMS,” Berliner said.

Vermont could receive waiver approval in 2025, according to Berliner. The state has its work cut out in the meantime, such as updating its IT system to accommodate some of the federal requirements placed on California and conforming its proposal to the strictures the Centers for Medicare and Medicaid Services have already approved elsewhere.

“Right now is a really interesting time in the Medicaid space,” Berliner said. “This is the first time that states are really able to start thinking about how Medicaid can be leveraged inside the walls of a correctional facility.”