The Effects of Medicaid Coverage on Post‐Incarceration Employment and Recidivism

Research Objective Evidence suggests that expanding eligibility for in‐kind public welfare programs may improve health, economic, and crime‐related outcomes for former prisoners. The Affordable Care Act increased benefits for this population by authorizing expanded Medicaid eligibility. Coverage may increase access to treatment for conditions that impede employment and increase risk of recidivism (a health channel). By improving financial security, coverage may alter the incentives to commit crime (a financial channel). We estimate the effects of Medicaid coverage on employment and recidivism for adults released from state prison. Study Design We study sequential natural experiments in Wisconsin that expanded Medicaid availability to released prisoners, expansion of Medicaid to childless adults with income below 100% FPL, and the introduction of prison‐based Medicaid enrollment assistance. Using person‐level longitudinal data that links Corrections, Medicaid, and Unemployment Insurance data, we implemented two‐stage least squares instrumental variables (IV) analysis. Three variables comprised the key instruments corresponding to three policy periods: eligibility expansion; a 3‐month enrollment assistance implementation period; and the fully operational enrollment assistance program. The key assumption is that timing of release is unrelated to the outcomes, conditional on the other variables in the model. Outcomes included reincarceration within 6‐ and 12‐months, and post‐release quarterly employment status and earnings. Population Studied The population includes adults ages 19–64 incarcerated by the state who were released to the community between January 2013 – June 2017 (N = 32,846 individuals). The primary sample includes all releases; the secondary sample includes the first release per person. Principal Findings The instruments were highly correlated with Medicaid enrollment in the month of release (F‐statistic of 7104). Relative to the baseline period, the percentage point (pp) increase in the likelihood of enrollment associated with expanded eligibility, the program implementation period, and the fully operational enrollment assistance program were 30.1, 47.6 and 61.1 respectively (p < 0.05). At baseline, the percentage of the population that was reincarcerated within 6‐ and 12‐months was 17% and 30% respectively. Medicaid coverage was associated with a 2.3 pp relative decrease in the likelihood of reincarceration within 6‐months among all releases and a 3.2 pp decease among first‐releases (p < 0.05). Coverage was not associated with reduced reincarceration rates at 12‐months among all releases. Among first releases, it was associated with a 3.3 pp reduction (p < 0.05). Among all releases, Medicaid coverage was associated with a 5.5 pp increase in employment and a $243 increase in earnings during the quarter of release (p < 0.05) with larger magnitudes observed among first‐releases. In the first year post‐release, Medicaid coverage was associated with an increase of $1121 and $1615 among all and first‐releases respectively (p < 0.05). Conclusions Gaining Medicaid coverage within the month of release from state prison is associated with meaningful reductions in the likelihood of reincarceration and improved employment outcomes within the first‐year post‐incarceration. Implications for Policy or Practice Study findings highlight the significance of the Medicaid Re‐Entry provision of the U.S. SUPPORT Act of 2018 which encourages Medicaid programs to test strategies that ensure Medicaid enrollment for individuals before they exit the correctional setting. Primary Funding Source Office of the UW Vice Chancellor for Research and Graduate Education, the Wisconsin Partnership Program, and the NIH (3UG3DA044826‐02S1).