How Medicaid Mental Health Coverage Could Keep People Out of Jail

More Public Transit Can Mean More Access to Care

By Kosali Simon, PhD
January 7, 2022

Kosali Simon is a health economist and professor at Indiana University. She studies health insurance and health policy.

It’s become a common observation that our criminal justice system often doubles as our country’s primary mental health provider. Around half of people incarcerated in the U.S. suffer from a mental illness. A recent study suggests expanding Medicaid coverage could reduce the number of young people with mental illness who end up incarcerated.

There are so many factors beyond Medicaid that could have an impact on incarceration, so it’s normally difficult to connect changes in Medicaid coverage to incarceration. But in her working paper, Stanford University postdoctoral fellow Elisa Jácome took advantage of the fact that South Carolina ends Medicaid eligibility for most childless adults at age 19, allowing her to more directly study Medicaid’s role. She used an incredibly rich dataset from the state that included individual-level Medicaid claims and criminal justice records to assess the relationship between Medicaid coverage and incarceration. 

She took a sample of Medicaid eligible men born between 1990 and 1993 and split them into two groups: those who were enrolled in Medicaid just before their 19th birthday and those who weren’t. She found those who had Medicaid and lost it at 19 were 15% more likely to be incarcerated at any time over the next two years. Most importantly, she found this difference was driven almost entirely by men with mental illness, who were 22% more likely to be incarcerated by their 21st birthday. This was even more common for those who had recent prescriptions for mental health medications or used mental health services in the 18 months leading up to their 19th birthday.

There are limitations to this paper: The data don’t show what other type of insurance coverage (if any) the men in the comparison group had access to; there are other factors that influence whether someone ends up incarcerated; and many people with mental illness don’t receive any kind of treatment regardless of coverage. But this study strongly suggests that sustained Medicaid coverage (through its impact on access to mental health care) can reduce incarceration, which continues to disproportionately affect minority groups.

We know Medicaid plays an outsized role in providing health coverage to communities of color (including more than half of Black, Hispanic and Native American kids), and Jácome’s research adds to the growing body of evidence showing Medicaid’s impact on racial equity. This evidence base should be at the front of policymakers’ minds as they continue to debate key Medicaid policy questions, such as what to do for people living in the 12 states that have not yet expanded Medicaid and how to end coverage for millions of people expected to lose Medicaid post-pandemic. 

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