A Welfare Analysis of Medicaid and Crime

We calculate conservative estimates for the marginal value of public funds (MVPF) associated with providing Medicaid to inmates exiting prison. Our MVPF estimates, which measure the ratio between the benefits associated with the policy (measured in terms of willingness to pay) and its costs net of fiscal externalities, range between 3.44 and 10.61. A large proportion of the benefits that we account for are related to the reduced future criminal involvement of exiting inmates who receive Medicaid.

Our findings are largely consistent with others in the sparse literature investigating the crime-related welfare impacts of Medicaid access and suggest that public health insurance programs can deliver sizeable indirect benefits from reduced crime in addition to their direct health-related benefits.