August 11, 2014 at 1:00 am

Medicaid shift could save Michigan prisons $19M

Lansing— The Michigan Department of Corrections expects to save at least $19 million on health care next year by enrolling inmates and parolees in the state’s expanded Medicaid health care program.

Corrections officials and experts argue that providing uninsured ex-cons with treatment for the mental illness, substance abuse and chronic health conditions that otherwise can lead them to commit crimes again could reap future savings in the state’s $2 billion-a-year corrections budget.

“What we’re ... excited about is that there’s been a number of studies that show having health care is associated with lower recidivism,” Department of Corrections spokesman Russ Marlan said. “We think it will be successful in lowering recidivism rates and helping them (inmates) transition back into society.”

But questions remain, such as whether ex-prisoners will use the new benefits that are allowed under the federal Affordable Care Act of 2010. And critics of the health care law have called it a costly experiment.

The extra spending generated by expanding Medicaid across the country is expected to add an estimated $950 billion to the national debt in 2014-22, according to a Phoenix-based Goldwater Institute study, depending on how many states go along.

Michigan’s decision to expand Medicaid effectively increases the national debt by $22.5 billion through 2022 based on the Goldwater Institute study, said Jack McHugh, senior legislative analyst for the free-market-oriented Mackinac Center for Public Policy in Midland.

“Naturally, state legislators when playing this game will seek to maximize the benefits to their state. In my mind, that’s understandable and not necessarily objectionable,” McHugh said. “I think the problem is with Washington spending like a drunken sailor, and the Affordable Care Act is part of that.”

Michigan is among 26 states that adopted Medicaid expansion and is joining a growing number of states — including New York, Connecticut and Oregon — that have decided to provide the health benefits to criminals.

Michigan would save an estimated $16.8 million by shifting health costs to the federal government for in-patient stays at community hospitals for inmates. Under federal rules, Medicaid doesn’t cover health care provided inside prison facilities.

The Department of Corrections, which has 43,331 prisoners, also is working to enroll the state’s 18,000 parolees in expanded Medicaid — which is expected to save an additional $2.2 million in the fiscal year that starts Oct. 1.

States routinely cut off Medicaid to offenders who have received it on the outside, as soon as they enter a jail or prison.

But New York recently allowed the benefits to be suspended, so subsidized health coverage could be quickly reinstated when inmates are released. Republican Sen. Bruce Caswell of Hillsdale introduced a similar bill in July that would allow for the quick reinstatement of health benefits for Michigan’s mentally ill offenders.

Research has shown that prisoners with untreated health conditions are more likely to end up back in prison.

An Urban Institute study of 1,100 Texas and Ohio offenders found that 84 percent of the men and 92 percent of the women had a physical, mental or substance abuse condition. Most were uninsured on release. And those with health problems had greater difficulty adjusting to life in the community and a higher likelihood of ending up back behind bars, according to the study by the Washington, D.C.-based research group.

“If you have a chronic physical problem and it gets in the way of your ability to work, being able to be employed is a real key to (successful re-entry),” said Kamala Mallik-Kane, an Urban Institute research associate and one of the study’s authors.

“People who had mental health conditions had a hard time finding housing, finding employment. They had worse trouble with family reunification, real problems with substance abuse and were more likely to end up back in the system.”

Before Medicaid expansion, the chief way prisoners could get proper subsidized care “was if they were so ill that they were deemed disabled,” Mallik-Kane said.

“... When you get people with these very serious conditions connected to treatment, they do recidivate less.”

In Michigan, as in other states, mentally ill prisoners receive treatment and medication while they are incarcerated. But a majority of parolees don’t have health or mental health coverage after release, according to Marlan.

The result is that offenders whose conditions were stabilized while in prison are unlikely to afford the medications when they are released. The state spends about $9 million annually for treatment, medication and housing assistance for a limited number of mentally ill offenders after they’re paroled, Marlan added.

Health care is so critical for some offenders, especially the mentally ill, that they are kept in Michigan’s prisons beyond their parole dates primarily to receive health care. Without treatment and medication, they are likely to commit crimes again.

“In the past, the big question for the Parole Board (was) ‘Will they be able to continue (mental health treatment) in the community,’ and the answer was no,” Marlan said. “What we found was that prisoners were being held for years and years past their parole date because the Parole Board was concerned they wouldn’t be able to get their mental health treatment in the community.”

KBouffard@detroitnews.com