Medicaid Overhaul Complicates States’ Plans to Bring Care Into Jails and Prisons

Dan Gorenstein (DG): Since he left jail, Cody Coughenour’s life has changed. The clearest signs are tucked inside his ottoman.

Cody Coughenour (CC): It’s filled up with coconut water, and staples, and mango slices.

DG: His foot stool used to be stuffed with needles and other drug paraphernalia.

And here’s the most important thing about that ottoman.

CC: On top… is my Molina card.

DG: My Molina card, says Cody. That’s his Medicaid card.

One small tangible sign of a large experiment unfolding across the country.

States are now starting to enroll people leaving prison and jail in Medicaid, the health insurance program for low-income and disabled Americans.

The goal: make sure people leave with meds in hand, appointments on the calendar and a better chance of staying alive. 

Autumn Boylan (AB): Overdose death rates are more than a hundred times higher in the two weeks after release from incarceration than they are for the general population.

DG: These reentry programs though are colliding with HR1 – the bill passed last year by Congress that makes massive changes to Medicaid.

Today: how Medicaid behind bars is working and how HR1 and the Trump administration are likely to shape the future of these programs.

From the studio at the Leonard Davis Institute at the University of Pennsylvania, I’m Dan Gorenstein. This is Tradeoffs.

*****

DG: Cody Coughenour is 47. He lives in Port Angeles, Washington, near the Canadian border.

He’s had problems with meth, his mental health. He’s landed in jail at least a half dozen times.

Whenever he’d get out, the jail would hand him a number to call Medicaid.

CC: It would either go to a voicemail or there’d be a long, you know, like, um, you know, “Next, your n- the next call will be 45 minutes from now,” you know?

DG: Cody had little patience for that.

CC: I’d go right to the dealer’s house.

DG: But this time, December 2025, it was different. He left jail with meds for his anxiety, and his Medicaid card.

CC: We just went straight to the, the treatment, uh, facility.

DG: Cody’s first stop last winter was to treat his substance use.

That kind of handoff is exactly what this new Medicaid experiment wants to do: easy access to care during a critical transition.

19 states have been approved to start  programs to make it easier for people like Cody to focus on their health care when they leave jail or prison.

Some of them are two years old now. So we asked Tradeoffs reporter Julie Wernau to get a sense of how well they’re working.

Hi, Julie.

Julie Wernau (JW): Hey, Dan.

DG: So I know you spent a lot of time focused on Washington State, where Cody is, because it’s one of the most established reentry programs in the country.

For context,  states need federal approval to turn Medicaid on behind bars because historically inmates were excluded, which left state and local governments to pick up the tab for a population of people with higher rates of disease than the general population. 

Hepatitis, mental illness, HIV, addiction.

JW: Yeah, one of the biggest drivers behind these reentry programs, Dan, was to reduce overdose deaths. 

What was happening was that people who used opioids would get locked up, stop using and their tolerance would drop. 

Then they’d get out and the same doses they were used to would now be deadly. 

DG: So now, thanks to the federal waivers, we’re seeing nearly half the states adopt programs. 

And that brings us back to Washington State.

What is it, Julie, that makes the Evergreen State somewhat of a national model?

JW: Well, it’s one of the first states to actually go live with this historic change.

Washington jails now routinely assess people before release for substance use, treat hepatitis C and treat addiction with long-acting drugs.

TBD if this is reducing mortality or trips to the ER… that will take time.

But officials do credit the program for cutting recidivism.

Encouraging enough results, Dan, that other states are trying to sneak a peek at Washington’s homework, you know, like we did back in math class. 

Tyron Nixon (TN): How did we launch our website? How do you get your counties involved? How did you get funding out the door?

JW: That’s Tyron Nixon, he helps lead the reentry rollout at the state Health Care Authority.

It’s taken Washington three years to get here, Dan.

And the state kinda had to tear Medicaid and the whole carceral system down to their studs to figure this out. 

Tyron says at one point their zoom calls ballooned to 500 people.

TN: Everyone got in to really talk about this. What does all of this mean? What is a jail? What are we gonna do? How is it going to look? What is needed?

JW: There were hundreds of tiny problems at every jail and prison in the state.

The reason states are seeking Washington out now is because they’ve done their best to tackle three big challenges. 

DG: You know there’s nothing I love more than a list of challenges. Where are we starting, Wernau?

JW: Work on top of Work, Dan, is challenge number one. I talked to Penelope Sapp, who runs the jail in Kitsap County – a ferry ride away from Seattle. 

Penelope Sapp (PS): I get up at midnight on weekdays to start my Medicaid work because I have to do my chief work at eight o’clock.

JW: You get up at midnight?

PS: I do.

JW: And you go to bed at what time?

PS: I usually fall asleep at 6:30 after a bunch of good TikToks.

JW: Penny basically has a second job managing Medicaid. 

Every week, she is keeping track of five Medicaid insurance companies, who’s getting released, and what needs to happen to get them to clinicians on the other side.

Then there’s the data collection, the troubleshooting, the paperwork. 

Every jail in the state is grappling with their own version of this kind of extra work. 

DG: And so what’s the solution to all this?

JW: Well, part of the answer is unsatisfying…there’s little to be done… setting up new systems just requires extra work. Long hours. Short weekends.

Lawmakers did throw folks a bone when they hired a company to streamline Medicaid billing. 

That did take some work away. 

DG: As they like to say in Minnesota, ‘oftah.’ So that’s challenge one, what’s challenge two?

JW: Challenge two: Buy-in. Tyron Nixon says he sent his staff out to literally knock on doors to convince local governments this was both possible and worth doing.

TN: There were some facilities that were building new jails. There were jail modernization projects going on. We had heard stories about, you know, “Hey, the jails need to work on this. The pipes are falling apart.” And all those kind of things. So all of that was upfront competing priorities.

JW: To surmount this obstacle, Tyron says, It’s about how they communicate. They brought jail operators in on the decisions, instead of just handing down orders. 

TN: We met weekly, bi-weekly, monthly. There were sub-committees. This was, um, a trust building, something that- something that I think we had to earn.

JW: Getting this going involved medicaid officials, prisons, county leaders, insurers, doctors, nurses, sheriffs.

DG: This helps explain those 500-person zoom calls!

JW: Those calls were some of the earliest tests of the public safety and the Medicaid worlds colliding.

And that brings us to challenge three: Integrating two entirely different systems.

Here’s Marc Stern, a Washington doctor, who has spent 25 years working inside prisons and jails. .

Marc Stern (MS): What we really needed was a translator between the Medicaid agency and the jails, ’cause Medicaid doesn’t speak jail and jail doesn’t speak Medicaid.

JW: Dan, even the most simple tasks were tough to piece together.

The best example, trying to get all the computers to talk to each other.

State Medicaid officials assured Penny Sapp, the jail chief outside Seattle, that her staff would be able to enroll people online in just a few minutes.

But they kept hitting error messages.

Penny Sapp (PS): Declined. Call this number and then you’re waiting.

JW: Sometimes, she says, they’d be on the phone for two hours for one person.

And it’s indicative of all of those tiny problems that cropped up. Like delivering meds.

When you are in the hospital, getting meds usually comes from some kind of nurse, right.

Well, in jail and prison corrections officers are needed to escort people to get them and bring people back to their cell.

Medicaid? Only pays for the nurse. But jails want a program that reimburses them for that total cost of care. 

DG: So those are the three challenges. Work on top of work. Getting buy in. And starting to integrate these two totally different systems together. 

Working through all that, means that now before leaving jail, people are getting treated for hepatitis C, are starting long-acting drugs to treat opioid addiction and are connected to primary care.

And recidivism is down. It sounds like a promising start. 

JW: I think that’s right, Dan. And just doing this work is opening eyes for people. 

Penny Sapp says now that she and her staff are dealing with Medicaid on behalf of their inmates it’s clear to them why so many people struggle to get care. 

PS: imagine having a mental health issue, and you’re supposed to call this number to get your services reactivated, and then you have to go check in with the Department of Corrections, and then you gotta go get your ID card. All of that is overwhelming when you’re having a hard time coping with that. That’s why nobody does it.

JW: With the program up and running, Penny says she’s seeing more former inmates working and reconnected with their families. 

It leaves her feeling like she’s finally doing her job.

PS: We’re called corrections officers, and we always joke, “Well, what are we correcting?” But now we are actually correcting things, not necessarily behavior, but correcting system failures 

DG: After the break, the path for states to follow in Washington’s footsteps gets more complicated.

BREAK

DG: Before the break, we went to Washington State, where: people are leaving jail with coverage, medication in hand and a straight shot to treatment.

But Washington began to ramp up operations two years before Congress passed the ‘Big Beautiful Bill,’ or HR1, which made major changes to Medicaid. 

Now states must juggle trying to stand up their reentry programs AND implement work requirements on tighter budgets.

Let’s bring back Tradeoffs reporter Julie Wernau. Julie, what did you hear from the states that are trying to do all this at the same time?

JW: Here’s the headline, Dan, HR1 is not killing these waivers outright. 

More, it’s sending states down a few different paths. Some are hitting pause. 

Others are moving forwards despite the shifting landscape, but now must negotiate with the Trump administration. 

DG: Right. Most of these states initially hammered out their reentry programs with Biden health officials. 

JW: Exactly. And that’s the other path, California is among states trying to figure out how to renew its very blue plan with a very red administration. 

So here’s my idea, Dan, if you’re game, I’d like to take you on a little tour.

DG: Good news, June’s been a crazy month, my bags have done been packed! Where should we start?

JW: Great. Let’s start in Oregon, a state that puts a premium on health insurance.  

So adding people leaving jail and prison is sort of a no brainer. Here’s state Medicaid director Emma Sandoe. 

Emma Sandoe (ES): It is an extremely complex time for people navigating employment, housing, we have a gap in our healthcare system, at the most crucial time in many people’s lives.

JW: But despite her conviction, Emma compares trying to comply with HR1 AND designing the reentry program to scaling her state’s highest peak. 

ES: Climbing Mount Hood feels relatively easy in comparison.

JW: What she’s really saying, right, is that this reentry program is basically a giant Medicaid project landing on top of several other HR1-related Medicaid projects.

ES: Picking between the least bad options is really something that we’ve had to become accustomed to over the last year, year and a half.

JW: Like we were talking about with Washington state, this is just more complicated than flipping a switch.

Rhode Island and Michigan, they’re also pausing their programs due to HR1.

DG: Some clear fallout from the ‘One Big Beautiful Bill.’ 

Ok, Julie. Oregon was the first stop on our three state tour. Where are we off to next?

JW: Grab a souvenir, Dan! We’re off to Baton Rouge.

Louisiana is one of about half a dozen states, including Connecticut and Nevada that have pending requests with the Trump administration.

Press conference: Alright, good afternoon, is the press ready?

JW: This past spring, there was this press conference and it seemed like the whole Medicaid world was watching. 

Louisiana officials announced their state would be the first reentry waiver granted under President Trump. The governor was there.

Press conference: Oz is texting me all the time. Hey, ya’ll guys are doing great.

JW: The Health Secretary.

Press conference: Good afternoon everyone… 

JW: And here’s the really big deal. 

DG: Wait, was Trump there?

JW: No….! Way to ruin my big reveal, Dan! No, not Trump.. Dan Brillman … the President’s Medicaid Director. 

Press conference: Louisiana stepped up right away. I came down here. We got it done.

JW: Believe it or not, Dan, this 20 minute press conference was must-see TV. 

Basically, the Oscars for the Medicaid wonks’

DG: The Oscars, Julie? Really? 

JW: That’s how Louisiana’s health secretary  Bruce Greenstein described it to me on a recent Zoom call. And I buy it, Dan. 

Until this press conference, no one knew whether the Trump administration would be game to continue approving these waivers. 

So other states were watching it like a red carpet, not for the outfits, but for the signals:,

Bruce Greenstein (BG): I can imagine that there’s a great deal of curiosity surrounding, uh, what happened to be a serendipitous day. I know you wanted maybe for us to, to spill all the drama beans for the Oscars, but some of them were really serendipity.

DG: Julie. It’s hardly like officials from the Centers for Medicare and Medicaid Services just wander into random state press conferences. How’d Louisiana get CMS to show up?

JW: I know. I get it. So, I asked Bruce and his team to spill those beans? 

DG: Drama beans, Julie.

JW: Right. Drama beans.

Deputy secretary, Pete Croughan says getting CMS to sign off was less about what they included. 

And more about what they took out. 

Pete Croughan (PC): We went through a pretty intensive delete process.  

DG: I mean most Republicans have made it clear they want Medicaid to have a smaller footprint, so it tracks that CMS would be looking for tighter reentry programs, too.

What’s Louisiana’s plan to make the math work, Julie?

JW: After extensive meetings in Washington, Pete says they found two ways. 

PC: Trim your benefits package to the minimum necessary and look at alternative funding sources for infrastructure costs. 

JW: Let’s break this down, Dan. 

When Pete says ‘trim your benefits package’ what he’s saying there is shrink the number of services the state will offer inmates before they leave. 

To figure out what they’d cut, he says the team went line by line asking: what’s absolutely essential for someone to make their first appointment on the outside? 

PC: We’re really focused on behavioral health conditions, screening for infectious diseases, and things like where it’s gonna be hard to navigate the community if you don’t have a wheelchair.

JW: To be clear, by law, states are required under these waivers to provide people with whatever meds they need and someone to help them get care on the other side. 

DG: Ok. So, Julie, the big question, what did they take out to get federal health officials to green light this plan?

JW: Initially, Louisiana, like other states, wanted to bring primary care providers inside jails and prisons before release … and bill those services to Medicaid. 

The idea? The sooner you do a person’s medical workup, the easier it is for them to focus on stabilizing their lives. 

But, with a smaller budget, they let that go. 

PC: There’s definitely evidence that folks with untreated mental health and addiction issues are more likely to die. So, we have to solve for that. I don’t know that there’s evidence for that for someone with untreated knee pain. So can we just wait a week and then we remove, trying to do comprehensive primary care in the, in the jail setting.

JW: Here’s the needle Louisiana is trying to thread. 

The state – very much – wants to provide care to inmates before they leave. 

DG: But..

JW: But basically, it’s cost prohibitive

So people will get that essential care we’ve talked about, an introduction to a primary care provider who they can see on the outside and someone who can help them navigate the larger health care system. 

DG: Got it. 

So I guess I’m curious how this more modest approach – with less primary care – will end up impacting people’s health. 

JW: Right. That’s the question I put out to Duke professor Lauren Brinkley-Rubinstein

She says that the services Louisiana picked do have the greatest impact on health and mortality. 

That said, this is a population with more chronic medical conditions than the general public. 

If people’s health goes untreated, she says, research shows people are likely to struggle mentally and turn to substances. 

 Lauren Brinkley-Rubinstein (LB):  Primary care is the lowest-hanging fruit. The more unwell you feel in your body, the more unwell you’re going to be in your mind, and often substance use is treated as a coping mechanism and you’ll find yourself coming right back into the prison or jail that you just left.

JW: Pete says even without primary care, this program means progress. 

PC: You look at which outcomes are you really trying to move, and in Louisiana being fifth worst in overdose rates, we said, you know, we have to pick some priorities. 

DG: So you said there were two ways Louisiana is making the money work … the first is fewer services. What’s the other one?

JW: Pete says this is where the state got creative. 

So they needed ways to fund the stuff we talked about in Washington state – computers talking to each other and all that extra work. Louisiana is using savings they’re getting by being able to bill Medicaid and other federal funding pots – like the rural health fund and another pool of money that’s for IT overhauls. 

DG: Any sense, Julie, whether Louisiana is the model that CMS will be looking for from other states?

JW: CMS declined to answer that question, Dan. 

But in a statement they did make it clear they are taking a hard look at spending, which I take to mean that funding will be limited whether it looks like Louisiana or not.

My other takeaway might be a bit obvious at this point, but it needs saying, people were unsure if the Trump administration would support this work at all. 

DG: Right, but it’s now clear that they do.

Where are we going next Julie?

JW: Put on that sunscreen, DG. We’re headed to the sunny skies of California.

The Golden State was the first in the nation to launch this kind of reentry program back in the fall of 2024. 

Which means they’re the first state up for renewal. 

DG: Right. How does a very blue state – that got its first plan approved by Biden now work with a very red administration. 

JW: That’s why the Louisiana press conference was ‘must-see TV’ for Autumn Boylan.

Autumn Boylan (AB): I oversee California’s Reentry Demonstration Initiative, [and] other behavioral health initiatives.

JW: This development began to answer some questions for Autumn and her team.

AB: We were certainly energized and excited about the announcement by our partners in Louisiana  which I think is a really hopeful sign of things to come.

JW: California had reason to read that moment closely. A state report shows more than 20,000 people have gotten on Medicaid through this program in just the first year. 

DG: Right, Julie. This is already real for California, their reentry program is up and running.

JW: Exactly, but here’s the tension: California’s waiver is part of a much more ambitious vision. 

The state wants to help people manage the whole messy process of getting back on their feet. 

That often means housing, food, transportation.

To that end California’s program includes sobering centers, medically tailored meals and help finding a place to live.

AB: Access to healthcare services is a critical part of the puzzle, but it’s not the only puzzle piece.

DG:  Right, Julie. And this broader vision, what is often called Social Determinants of Health, is very much in doubt under this Administration. 

President Trump has pulled back Biden-era guidance that encouraged states to use Medicaid waivers in this way. 

Ok, Julie. Thanks for the cross-country tour. 

States putting their programs on pause, states already negotiating with the administration and states gearing up to negotiate. 

What’s your big takeaway as folks balance their reentry programs with the historic changes to Medicaid under HR1?

JW: I heard this great line from Tamara Vanover – the case manager for Cody Coughenour in Washington. 

Tamara Vanover (TV): A warm hand-off is not warm if it’s a piece of paper.

JW: The point to me, Dan, is that a warm handoff is about making sure we’re giving clinicians and case workers what they need to help people after they’re released.

What’s too soon to say is how ‘warm’ any of the programs are right now. 

The goal is to save lives and we are waiting on better data to help us understand if that’s happening. 

DG: A story, I know, you’ll continue to follow. Thanks for your reporting, Julie.

JW: Happy to help, Dan.

DG: As for Cody himself … he’s found the hand-off from jail to the health care system just right. 

CC: Being able to have therapy, having a care navigator, being able to just access these resources, it stretches out in so many, so many different aspects. It’s like a, it’s like the veins of a leaf or something.

DG: Life looks different now. 

CC:  I just started a stew that I’m gonna cook down and then probably take off the, out of the Crockpot after I get done with work.

DG: Less chaotic. More predictable. 

He’s now in school to become a phlebotomist, someone who draws blood.

And the best part, Cody says, he’s spending time with his daughter.

CC: She’s, uh, 14., our first interaction from after being, you know, absent in her life, um, she wanted to, like, bake cookies and so, I, uh, I put on this song by, uh, Greta Van Fleet, “The Heat Above,” and it was just, you know it’s amazing.

DG: Cody says they cried a little and then ate their sugar cookies.

I’m Dan Gorenstein. This is Tradeoffs.