Richard Forbus, MBA-HCM, CCHP-A, CO Captain (Ret.), Vice President of Program Development
I recently attended the National Sheriffs’ Association (NSA) conference in Omaha, Nebraska, where the Health and Reentry Project presented an update on Medicaid changes affecting correctional facilities.
The discussion focused on two major developments: Section 1115 reentry demonstration waivers and mandatory Medicaid/CHIP services for eligible youth. Both are beginning to reshape how correctional facilities, Medicaid agencies, and community providers coordinate care before and after release.
These changes are promising, but implementation will be complex. Correctional health systems will need to understand what is required, what is optional, and what operational changes may be necessary.
Section 1115 Reentry Demonstration Waivers
Section 1115 of the Social Security Act gives the Secretary of Health and Human Services authority to approve experimental, pilot, or demonstration projects.
For correctional health care, Section 1115 reentry demonstration waivers allow approved states to cover certain Medicaid services during a defined prerelease period. The goal is to support reentry, improve continuity of care, and authorize Medicaid reimbursement for approved services before release.
The waivers vary by state because each approval is based on the state’s application and identified needs.
At the NSA conference, we heard that Louisiana was moving closer to approval. Once finalized, Louisiana would become the 20th state with an approved reentry waiver. Of the states with approved waivers, several have begun providing approved services in facilities, and additional states are expected to roll out initial services over the next 6 to 12 months.
Several other states, along with the District of Columbia, have applied and are awaiting approval.
Mandatory Medicaid/CHIP Youth Services
Medicaid/CHIP policies for eligible youth also changed, with certain services becoming mandatory as of January 1, 2025.
This requirement applies in all states. Unlike the Section 1115 reentry waivers, it is not optional and does not depend on state-specific waiver approval.
The requirement applies to youth as defined by Medicaid:
- Individuals under age 21
- Individuals under age 26 who were formerly in foster care
The benefits apply to eligible individuals in postadjudication status who are within 30 days of release from custody. This affects both juvenile and adult facilities.
Despite the effective date, awareness remains uneven, and implementation has been slow in many places. Facilities should confirm how their state Medicaid agency is operationalizing this requirement and what role local facilities are expected to play.
Benefit Suspension, Termination, and the Inmate Exclusion Policy
The Medicaid inmate exclusion policy has historically meant that most care provided inside correctional facilities is not Medicaid-supported. Correctional facilities remain responsible for providing care, but Medicaid coverage is often not linked to the care a patient received before incarceration or after release.
Historically, many states terminated Medicaid coverage when a person was incarcerated. Reinstating coverage after release can require significant effort, potentially delaying or interrupting care for some of the most vulnerable patients in our communities.
That gap has undermined reentry efforts, even when facilities take proactive steps to coordinate release planning. Medication supplies and follow-up appointments can help bridge the transition, but they have not always been sufficient to ensure continuity of care when coverage is inactive.
This issue is especially challenging in jails, where release dates are often unpredictable. Many people are released within days, leaving little time to coordinate coverage, appointments, medications, and community-based services.
Beginning January 1, 2026, states are required to suspend Medicaid benefits rather than terminate eligibility for individuals who are incarcerated. Many states are still building the reporting and coordination systems needed to implement this change effectively.
This shift is an important step. If implemented well, it can support patient care, reduce administrative barriers, and improve coordination among correctional facilities, Medicaid agencies, and public health systems.
What This Means for Correctional Facilities
These changes create a structure for making benefits more available to people returning to their communities. Section 1115 waivers and youth coverage requirements can help bridge services for Medicaid-eligible patients and support continuity of care after release.
The challenge is implementation.
Correctional health systems cannot simply update a policy and move forward. The operational requirements are significant and will vary by state and facility type.
Facilities may need to address:
- Medicaid eligibility screening
- Coding and billing processes
- Reimbursement procedures
- Electronic health record changes
- Coordination with state and county Medicaid offices
- Staffing and workflow changes
- Contract amendments when services are provided by a contractor
- Compliance processes for Medicaid-supported services
Definitions of covered services will vary by state, and implementation will require close coordination between state Medicaid systems and individual facilities or prison systems.
In many settings, additional staffing and funding may be needed before facilities can implement these programs effectively. Even when legislation includes some funding support, start-up costs and administrative demands may exceed currently approved resources.
Why the Changes Matter
These changes do not eliminate the inmate exclusion policy. Most medical care provided inside correctional facilities will remain the responsibility of the facility and its health care provider. Correctional facilities also continue to have a constitutional obligation to provide health care.
However, these developments represent meaningful momentum.
They establish a framework that may improve prerelease planning, strengthen connections to community care, and expand access to resources for Medicaid-eligible patients. Over time, the administrative systems built for these programs could support broader policy changes and improved funding for correctional health care.
The short-term work will be difficult, but the potential benefits are significant: better continuity of care, improved access to medications and services, stronger community partnerships, and better support for patients with serious mental illness, substance use disorders, and chronic health conditions.
Correctional health care has managed many of these challenges in a silo for decades. These Medicaid changes offer an opportunity to connect correctional facilities more directly with community care systems.
Next Steps
This is a high-level overview of recent Medicaid changes affecting correctional facilities. If these developments are new to you, contact your state or local Medicaid office to determine how they affect your facility.
In my travels, I continue to find that many facilities are unaware of the youth-related requirements, even though they have been in effect since January 2025.
For updated information and technical assistance opportunities, visit the Health and Reentry Project at healthandreentryproject.org.
If you are interested in this topic or any of NCCHC’s services, please contact me directly. I would be glad to discuss how we can help you improve the quality of care in your facility.
