Next year, feds will pick up the tab for Minnesota inmate hospitalizations

A Minnesota law set to take effect next month means the federal government will pick up the tab on hospital visits by some inmates of Minnesota jails and prisons, a move that could save the state millions.

It's the first in-state change in decades to a long-standing rule that deems inmates ineligible for Medicaid, known in Minnesota as Medical Assistance.

Backers say the long-desired law was made possible in part by the Affordable Care Act, which expanded Medical Assistance eligibility to single adults — a demographic that makes up a large portion of people behind bars. Cost savings could run as high as $6.1 million for the Minnesota Department of Corrections, which operates the state's prisons, and $5.5 million for the state's counties, which pay for the jails.

Counties and the state will continue to foot the bill for medical care provided inside the detention facilities, which makes up the majority of the health care budgets.

The potential $11 million savings is "only a sliver of the cost, but a few slivers add up to real money," said Julie Ring, executive director of the Association of Minnesota Counties, which pushed for the change. Care for the state's incarcerated populations is becoming increasingly expensive, she said, as they come in with more serious health issues.

"It's not like 'Oh, I have a head cold,' " Ring said. "We're talking about people in county jails who have dialysis, cancer, and other difficult and expensive medical regimens. The cost of health care in county jails has really skyrocketed."

James Franklin, executive director of the Minnesota Sheriffs' Association, said that having more adults with health care coverage — both in and out of custody — could improve more than the bottom line.

When Medicaid was created in 1965, inmates were not eligible, leaving the states and counties on the hook for their hospitalizations and other inpatient care. That law went onto the books in Minnesota.

In 1997, the U.S. Department of Health and Human Services allowed inmates who needed hospitalization to become eligible for Medicaid if they otherwise qualified. Minnesota, however, did not automatically change its law, because eligibility would have to apply to both state prisoners and county jail inmates. As a result, Ring said, the Department of Corrections would have saved money, but the Department of Human Services would have had to pay the matching Medicaid dollars.

The Affordable Care Act not only expanded Medicaid eligibility, but increased the reimbursement rate from 50 percent to 100 percent. Financial projections say 67 percent of Minnesota inmates would be eligible for a 100 percent match, while another 33 percent would qualify for a 50 percent match.

"Any money that comes to us from a different source is free money," said Rep. Jim Abeler, R-Anoka, who co-sponsored the bipartisan House bill. "Federal money coming to us is free money."

Another sponsor of the bill, Rep. Diane Loeffler, DFL-Minneapolis, said it's a step toward cost savings. The growing demands of health care for inmates should be shared with the federal government, she said, particularly in light of inmates' disproportionately high rate of addiction and mental health disorders.

"I think it will be several months before we figure out what difference it's going to make overall," Stanek said. "But so many people get turned away from the front doors of the jail to begin with that we have to send them right over to the hospital to be stitched up. Every night is another half-dozen or so that we can't care for within the facility."