Medicaid's Role In Substance Use Treatment, Incarceration & Homelessness: What Might Be The Impact of Reduced Funding & Work Requirements?

Highlighted Stories

Editor's Note

This week’s Highlighted Stories examine the intersection of substance use disorder (SUD) and the criminalization of homelessness, both with explicit and implicit Medicaid implications.

A Health Affairs article explores the potential impact of Medicaid work requirements, raising concerns that such policies could disrupt care for individuals with SUD, who may struggle to maintain employment while in treatment. Losing Medicaid coverage could lead to treatment interruptions, increased overdose risk, and greater reliance on emergency departments. Local leaders are taking notice—a San Diego Union-Tribune article details how the county’s Board of Supervisors is assessing how proposed Medicaid cuts could affect planned substance use treatment programs. (Subscribers may also be interested in an upcoming FORE webinar on Medicaid coverage for opioid use disorder (OUD) treatment, listed below.)

Meanwhile, KQED reports that San Jose Mayor Matt Mahan is proposing the arrest of homeless individuals who repeatedly refuse shelter. In our August 6, 2024, Editor’s Note, we examined the consequences of incarcerating homeless individuals—especially in California, where an 1115 waiver allows Medicaid coverage within corrections. A key issue for Medicaid beneficiaries in jail is that they retain legal rights, including access to treatment in the least restrictive setting, as established under the Americans with Disabilities Act (ADA) and affirmed by Olmstead v. L.C. decision.

Further connecting homelessness and substance use treatment, a Vox article details the Trump administration’s skepticism toward the “Housing First” model, which does not require sobriety or treatment as a condition for housing. In contrast, the Biden administration authorized Medicaid funds for housing, expanding the view of housing as a form of healthcare.

The takeaway from these stories is clear: Medicaid plays a critical role across multiple interconnected issues, and major funding cuts could have unforeseen consequences. For example, if housing programs for the homeless depend on substance use treatment, but Medicaid funding is insufficient for this treatment, what happens? The final Highlighted Story from the Kaiser Family Foundation underscores the broad reach of Medicaid in shaping healthcare delivery nationwide.

SUD & Medicaid

Congress is debating whether to impose Medicaid work requirements, with proponents arguing they promote self-sufficiency and reduce spending, while opponents warn they could strip low-income and marginalized groups of health care access. A major concern is the impact on Medicaid enrollees with substance use disorders (SUDs), who often face barriers to employment and risk losing both coverage and life-saving treatment. In 2023, 11.1 million non-elderly adults on Medicaid had an SUD, making them particularly vulnerable. Research links treatment dropout—which could increase if work requirements are enforced—to higher overdose risks and increased reliance on inpatient and emergency care, undermining efforts to combat the opioid crisis.

San Diego County would lose significant momentum in its multi-year quest to transform substance use treatment if Congress goes through with Medicaid cuts of the magnitude that some speculate may soon occur. San Diego has ongoing plans to shift the region to a more-preventive mode of care that has already increased the availability of treatment programs and care for those in crisis. Existing plans that would add an estimated 16,000 “treatment slots” for those struggling with addiction by 2030. But there has been talk in Washington that a recent budget resolution which requests that the House Energy and Commerce Committee cut $880 billion in spending through 2034 will include significant reductions to Medicaid. Federally qualified health centers would likely be among the hardest hit as a significant percentage of their overall treatment volume is for patients with Medi-Cal (i.e. Medicaid) coverage.

Medicaid is the largest payer of opioid use disorder (OUD) treatment in the United States, covering an estimated 40% of adults under the age of 65 with OUD, and plays additional roles in supporting recovery services by funding peer recovery coaches and health-related social needs, and prevention initiatives such as school-based health services. With a wide range of new Medicaid policies now under discussion at the national level, proposed changes have the potential to significantly impact access to OUD treatment and related services which have contributed to a nearly 25% decline in fatal overdoses in the past year.

Homelessness & Medicaid

San José Mayor Matt Mahan is proposing that unhoused people who refuse multiple offers of shelter should face arrest, arguing that they have a “responsibility” to move indoors if the city has a bed available. Mahan’s plan would make San José the latest Bay Area city to escalate criminal enforcement against people experiencing unsheltered homelessness in the wake of a Supreme Court ruling last year that allowed arrests for sleeping outside. With a new six-vote majority on the City Council, Mahan will look to enact the enforcement measure as part of an ambitious budget proposal that also includes a shift in city funding to pay for temporary housing and shelter.

The Trump administration has moved to upend America’s long-standing approach to tackling homelessness. The “housing-first” model — which has enjoyed bipartisan support for decades — prioritizes getting people into stable accommodations before addressing other issues like mental health or substance abuse. This evidence-backed approach first gained prominence during George W. Bush’s presidency. But as homelessness has worsened due to the nation’s housing affordability crisis, conservative think tanks and GOP lawmakers have increasingly pointed to housing-first, and the network of nonprofits and service providers that support it, as the culprit. The first Trump administration recommended in exchange for housing assistance there be requirements for sobriety and other treatments. The Biden administration then pivoted back to unequivocal support for housing-first, even expanding it by authorizing federal Medicaid dollars for rental assistance — effectively embracing the idea that housing is a form of health care.

Medicaid: An Overview

Medicaid is the primary program providing comprehensive coverage of health and long-term care to 83 million low-income people in the United States. At the start of 2025, many issues are at play that will affect Medicaid coverage, financing, and access to care. While Medicaid was not discussed much on the campaign trail, Congress may consider big changes as part of tax and spending debates and the Trump administration may make changes to Medicaid through executive actions. Amid the potential changes, this brief highlights ten key things to know about Medicaid.

Follow Ups

Editor's Comment: Today's first correctional healthcare provider bankruptcy story isn’t about Wellpath but YesCare/Corizon/Tehum Care, whose bankruptcy we’ve covered multiple times (see Editor's Note, April 16, 2024). The bankruptcy judge has approved a settlement with YesCare, but with the unusual provision allowing people to pursue lawsuits outside of the settlement. The Guardian article digs into why correctional healthcare providers prefer bankruptcy courts in Texas. While the focus is mostly on Wellpath, YesCare/Corizon/Tehum Care also gets a mention.

Is it over? Last week, it seemed the wildcat strike by correctional officers in New York State might be winding down, but that now appears to have been overly optimistic. A new deal was reportedly reached on Saturday (March 9). However, because the strike was never officially sanctioned by the correctional officers' union, there were concerns that any agreement between Gov. Hochul and the union would not be enough to bring an end to the walkout. In fact, on Monday, March 11, according to the Associated Press, 2,000 guards were fired for refusing to return to work. Conditions inside state prisons remain in disarray, with seven prisoners reported dead since the strike began. Adding a new wrinkle to an already complex situation, U.S. Rep. Nick Langworthy (R-NY 23) has asked the acting Secretary of Labor to investigate the state’s handling of the strike.

Bankruptcy

A U.S. bankruptcy judge in Texas on Monday approved a $75 million bankruptcy plan by an affiliate of prison healthcare company YesCare, after a compromise that allowed prisoners and their families to walk away from the deal and instead pursue lawsuits alleging that the company provided poor medical care. U.S. Bankruptcy Judge Christopher Lopez approved the settlement, half of which will be used to pay prisoners’ personal injury and wrongful death claims, at a bankruptcy court hearing in Houston, saying that the case had seen a remarkable turnaround after a contentious start two years ago. Lopez said that it was rare for a bankruptcy deal to allow "true" opt-outs for people who would prefer to pursue lawsuits without strings attached.

Although bankruptcy is governed by federal code, jurisdictions will enforce it with varying lenience, and typically if a company has enough assets in a given state they can make use of its courts. In recent years, the southern district of Texas has become a go-to bankruptcy venue, displacing the southern district of New York as the second most popular in the country behind Delaware.

Wildcat Strike (New York)

A new agreement has been reached to end the wildcat strikes by New York State correctional officers that have disrupted the prison system. Negotiated by state officials and the correctional officers’ union, the deal calls for officers to return to work on Monday, March 10. The officers, citing staffing shortages, forced overtime, and unsafe conditions, had faced an ultimatum from the Department of Corrections: return to work or face discipline, termination, or possible criminal charges. On Saturday, the union agreed to the terms, which take effect when 85% of staff return. Any disputes will be resolved by an arbitrator. However, since the union did not officially authorize the strikes, how it will enforce compliance remains unclear. As part of the deal, the state agreed to pause some provisions of the Humane Alternatives to Long-Term Solitary Confinement Act (HALT) for 90 days.

New York fired more than 2,000 prison guards Monday for failing to return to work after a weekslong wildcat strike that crippled the state’s correctional system, but said enough officers had come back on the job to declare the illegal work stoppage over. The state and the guards’ union struck a new deal to end the strike this weekend, but it was contingent on at least 85% of staff returning to work by Monday morning. Although the number returning fell short of the 85% goal, Martuscello said the state would honor the deal’s overtime and some other provisions.

At Adirondack Correctional Facility, prison staff, including the superintendent, teachers, and counselors, took over meal delivery amid a wildcat strike by corrections officers. At Auburn Correctional Facility, two ailing men died after delayed medical care. As strikes persisted across New York’s prisons, their impact on both staff and incarcerated people became evident. Gov. Kathy Hochul announced a deal with the corrections officers’ union to end the stoppage, though since the strikes were never officially sanctioned, compliance remained uncertain. The strikes began Feb. 17, when officers at Collins and Elmira Correctional Facilities walked off the job, citing opposition to a 2022 law limiting solitary confinement, which they claim created unsafe conditions. They pointed to a recent incident at Collins, where inmates reportedly took over a housing unit. However, evidence suggests some guards may have allowed the takeover, and the State Police are investigating.

The latest deadline for corrections officers to get back to work or face consequences has come and gone. However, as of Friday, many remained on wildcat strikes outside of dozens of New York prisons. The strike, which has gone on for 19 days, is over what prison guards claim are dangerous working conditions and being forced to often work double and even triple shifts. U.S. Rep. Nick Langworthy (R- NY 23) said he's asked the acting Secretary of Labor to investigate New York State's actions relating to the suspension of health insurance benefits, which have now been stripped from more than 5,000 striking officers.

Justice Involved Women

This report presents updated research evidence that continues to amplify the need for gender-responsive principles and practices, including the role of victimization in girls’ and women’s offending trajectories and the intersection of relationships, relational identity, and trauma as key drivers for justice involvement. Further, because the perinatal needs of justice-involved women are a frequently overlooked area of inquiry among the gender-responsive literature, this scholarship is also summarized using a reproductive justice framework. Finally, this report illustrates the impact of gender-responsive scholarship by sharing some of the practice and technology innovations that have emerged, while acknowledging there is much yet to accomplish.

Opioid Epidemic

After launching a collaboration in 2023 to provide virtual opioid use disorder support to those transitioning out of prisons, Bicycle Health, Wellpath and the Federal Bureau of Prisons (FBOP) have signed an additional one-year contract with the option to extend another two years. Through the collaboration, Wellpath works with FBOP’s residential reentry centers and can refer those struggling with opioid use disorder to Bicycle Health. Residential reentry centers help people transition back into society after incarceration.

COVID-19

In the fall of 2020, with the Covid-19 pandemic raging, the Connecticut Department of Corrections (DOC) announced that a medical isolation unit used to care for Covid-19 positive, symptomatic people would be moved from Northern Correctional Institution to MacDougall. It became the central hub for prisoners with Covid-19 in the state. What followed was nothing short of a public health catastrophe. By the spring of 2023, nearly 12,000 prisoners contracted the disease, and 30 men had died. Of those 30, many took their last breaths in the infirmary at MacDougall-Walker. Often, the only person with them for their final moments was another incarcerated caretaker.

Food In Corrections

Feeding incarcerated people has become big business as states and counties outsource their food service operations. The food behemoth Aramark (which also services colleges, hospitals, and sports stadiums), as well as smaller corporations like Summit Correctional Services and Trinity Services Group, have inked contracts in the last decade worth hundreds of millions of dollars in prisons and jails across the country. Privatization of prison food isn’t a new phenomenon, but it’s growing substantially. In the last decade, several states quickly jettisoned private contracts after lawsuits revealed unsanitary and, frankly, disgusting conditions. In 2021, Mississippi canceled a contract with Aramark after a federal lawsuit described “spoiled, rotten, molded or uncooked” food, contaminated with rat, bird or insect feces.

State Roundup

California

Thirty officers who worked at a youth detention center in Los Angeles County have been charged with allowing — and in some cases, encouraging — gladiator-style fights among the teenagers being held there, reported California’s attorney general. A grand jury indictment charged the detention services officers at Los Padrinos Juvenile Hall in Downey, Calif., with child endangerment and abuse, conspiracy and battery. The indictment, he said, stemmed from an investigation opened by the California Department of Justice after video footage of one of the “gladiator fights” leaked in January 2024.

Minnesota

The Minnesota Attorney General’s Office filed criminal charges in Beltrami County on Friday against a correctional nurse accused of failing to check a critically ill inmate’s vital signs for the final two days of his life. Michelle Skroch, 37, of Sartell, faces charges of second-degree manslaughter and two counts of criminal neglect in connection with the death of Hardel Sherrell, court records show.

Nevada

The Nevada American Civil Liberties Union executive director,Athar Haseebullah, said the Nevada's penal system was rife with issues negatively affecting the well-being of prisoners. In 2012, the ACLU sued the state of Arizona for not supplying adequate medical care to the state’s prisoners. Nevada is “teetering on the brink” of similar litigation, Haseebullah said. The Nevada Department of Corrections pushed back against some claims made at the event, including complaints about broken air conditioning systems leaving inmates in sweltering conditions.

New Mexico

San Juan County Sheriff’s Capt. Kevin Burns, a member of the New Mexico Justice Reinvestment Working Group, said its 19 recommendations focus on shifting substance use disorder and mental health issues from the criminal legal system to healthcare. In state prisons, New Mexico Corrections Department policy requires each facility to form a reentry committee, but planning varies based on state supervision. In county jails, reentry depends on local priorities and resources, with many lacking dedicated reentry staff. Senate Bill 54 seeks to standardize reentry practices statewide, replacing the current patchwork of policies with a uniform approach.

North Dakota

Attorneys for former inmate Tsega Sharp have filed a federal civil lawsuit against the City of Fargo, Cass Public Health, two nurses, Cass County, and the jail administrator. Sharp was taken to a hospital ER for suicidal thoughts, where he reported nausea and stomach pain. After being medically cleared and released to officers, he was booked into jail under constant observation. Three days later, a Health Service Request noted he was shaking, spitting up blood, in pain, and felt like he was dying. Nearly a week after seeing a nurse, a corrections officer dismissed Sharp’s continued pleas for hospital care as fake, despite his distress.

West Virginia

A defendant jailed on a felony charge since August required emergency surgery and spent nearly two weeks at WVU Medicine United Hospital Center before returning to jail. Despite discharge papers ordering a follow-up appointment on Feb. 19, he was never transported, his lawyer told a judge. The jail also discontinued five of his eight prescribed medications, despite his repeated requests. Meanwhile, the West Virginia Legislature passed Senate Bill 1009, restricting taxpayer-funded medical care for incarcerated individuals. The law defines medical procedures broadly, covering surgery, treatment, and prescription drugs for illnesses, injuries, or other conditions.

Wisconsin

Another inmate has died at Wisconsin's oldest prison, the seventh since 2023 and less than a year after the then-warden and multiple members of his staff were charged with misconduct and felony inmate abuse. Prosecutors last year charged warden Randall Hepp with misconduct and eight members of his staff with felony inmate abuse in connection with the deaths of two of the prisoners, Cameron Williams and Donald Maier. Three of the eight staff members also were charged with misconduct.

Correctional Officers

Unions representing federal correctional officers at the penitentiary at Allenwood say they are facing a crisis point with pay cuts and hiring incentive freezes making a dangerous job even more so. The guards said they are losing incentives and say the morale is low at a time when there are staff shortages and the prisons are struggling to remain competitive with jobs in the private sector. The Bureau of Prisons (BOP) is currently without a director and has seen many longstanding employees retire.

The correctional workforce in the U.S. is facing a crisis. Since the Covid-19 pandemic, the total correctional workforce has shrunk by 11% in state prisons and 7% in local jails, according to data from the Census Bureau’s Annual Survey of Public Employment and Payroll*. While public discussions often focus on prison reform and inmate rehabilitation, an equally pressing issue is the well-being of correctional officers and other staff, who endure high levels of stress, long hours and frequent exposure to trauma.

Private Prisons

Damon Hininger, the chief executive of CoreCivic, which operates private prisons and immigrant detention centers, opened an investor call last month on a buoyant note. “I’ve worked at CoreCivic for 32 years, and this is truly one of the most exciting periods in my career,” he said, adding that the company was anticipating in the next several years “perhaps the most significant growth in our company’s history.” CoreCivic, GEO Group and some smaller private prison companies are becoming a key cog in the Trump administration’s plan to hold and then deport vast numbers of undocumented immigrants.

Correctional Healthcare Providers

NaphCare

Advocates for inmates incarcerated by Arizona’s Department of Corrections, Rehabilitation, and Reentry say ADCRR doesn’t have what’s necessary to run a successful healthcare system, according to the ACLU’s motion for a receiver. Lawyers say NaphCare, the for-profit healthcare provider contracted by the state, remains "woefully inadequate." Court expert reports say, "NaphCare offered a paltry two-dollars-per-hour increase to physician salaries between December 2023 and July 2024 and has made none since."