Pre-Trial Inmates Get Medicaid Back: New Law Ends Coverage Ban 60 Days After Signing

This new legislation, the Due Process Continuity of Care Act, makes a critical change to how Medicaid works for people who are in jail waiting for their day in court. Currently, if you’re an "inmate in a public institution," your Medicaid coverage is automatically cut off. This bill strikes that ban for anyone who is in custody pending disposition of charges—meaning they haven’t been convicted yet. For people relying on Medicaid for chronic conditions, mental health services, or addiction treatment, this is a massive shift. The change kicks in fast: services provided 60 days after the bill is signed will be covered.

The End of the Coverage Cliff

Think about the practical impact here. If someone is arrested and detained pre-trial, they are legally presumed innocent. But until now, being detained meant losing access to essential care, creating a major public health issue when they were eventually released. If a person with diabetes or a severe opioid use disorder loses their coverage, their health crisis doesn't pause just because they are in lockup. Section 2 of this Act ensures that Medicaid can pay for the necessary medical services while they are detained, preventing a gap in care that often leads to costly emergency room visits or fatal relapses upon release. By January 2, 2026, states will no longer be allowed to simply terminate a person’s Medicaid eligibility just because they are incarcerated, although they can still suspend it under certain conditions.

$50 Million to Fix the System

It’s one thing to say coverage is restored; it’s another to make sure the system can actually deliver. That’s where Section 3 comes in, authorizing up to $50 million in federal planning grants to help states get their ducks in a row. States must apply for this money by showing the Secretary of Health and Human Services exactly how they plan to handle this new patient population. This isn't just a simple cash handout; states have to deliver a detailed plan.

To secure the grant, states must commit to several key actions. First, they need to figure out what care is actually needed by the pre-trial population—a formal needs assessment. Second, and perhaps most importantly, they must develop a sustainability plan to ensure there are enough Medicaid-enrolled doctors and specialists available, particularly for behavioral health and addiction treatment. This means working with law enforcement, jail officials, and healthcare providers to build a reliable network. They also have to plan for the necessary infrastructure, like setting up electronic health record (EHR) systems so that jails, clinics, and telehealth providers can actually bill Medicaid correctly for the services rendered.

The Real-World Challenge: Making It Stick

While the goal is solid—continuity of care for a vulnerable group—the implementation is where things get tricky. The federal grants are great for planning, but the long-term cost of actually providing these services will eventually fall to state budgets. State Medicaid agencies will have to manage a complex new group of patients whose care is split between the correctional facility and external providers, creating administrative headaches for billing and coordination. Furthermore, the requirement for a "sustainability plan" to recruit "enough" providers is fairly vague. If a state submits a plan that looks good on paper but doesn't actually result in adequate provider networks, the intended benefit—access to care—will be lost. This means the success of the Act hinges on states using these planning grants effectively to build robust networks, especially for specialized care like addiction treatment, which is already hard to access in many areas.