U.S. Spends More on Medical Care for Inmates than Seniors, Veterans, Military Personnel

President Obama has repeatedly demonstrated that there’s an extra special place in his heart for incarcerated criminals, but this is a bit much. The administration spends a lot more money on the medical care of jailed convicts than retired seniors on Medicare, active U.S. military personnel or veterans, including an extra $100 million in one year alone, according to a federal audit released this month.

The Federal Bureau of Prisons (BOP) consistently pays outside doctors and hospitals more to treat inmates than Medicare or other federal agencies would pay for the same services, according to the report which is the result of a Department of Justice (DOJ) Inspector General investigation. “We found that the BOP is the only federal agency that pays for medical care that is not covered under a statute or regulation under which the government sets the agency’s reimbursement rates, usually at the Medicare rate,” the report states. “Instead, the BOP solicits and awards a comprehensive medical services contract for each BOP institution to obtain outside medical services.”

This means the BOP negotiates its own rates for medical services, which is outrageous and ends up costing American taxpayers tens of millions of dollars annually. Without the cost regulations that apply to all other federal agencies, the BOP pays a premium above applicable Medicare rates for medical care. In fiscal year 2014, for instance, the BOP spent at least $100 million more for medical care than it would have if it had paid Medicare rates. Other law enforcement agencies, including those within the DOJ like the U.S. Marshals Service and the Federal Bureau of Investigation (FBI), stay within the Medicare rates to provide outside medical services for individuals in their custody. So does the Department of Defense (DOD), the Department of Veterans Affairs (VA) and the Indian Health Service to treat members of the military and their dependents, veterans and Native Americans.

In many cases the same medical providers that work for other federal agencies, charge the BOP a premium above the Medicare rate when treating inmates, the DOJ watchdog reveals. From fiscal year 2010 to 2014, BOP spending for outside medical services increased 24%, from $263 million to $327 million and the figure is only going to increase. “Medical spending constitutes a significant and increasing portion” of the BOP’s budget, the IG found. Specifically, the agency spent $905 million of its $6.2 billion budget on inmate medical care in one year alone, according to the figures provided in the report. This includes salaried BOP medical staff, prescription drugs, medical supplies and outside providers. In all, the agency purchases outside medical care at inflated rates for more than 170,000 inmates nationwide at a cost of more than $300 million annually. The contracts have reimbursement rates at least 15% above the Medicare benchmark rate, the report says.

The BOP claims its medical needs are more complex than other agencies because it provides chronic care for numerous inmates. Because medical providers have the choice not to treat inmates, the agency claims that it must pay extra. That still doesn’t explain why the government spends more money on the medical care of incarcerated criminals than active military personnel, veterans or senior citizens. Just because this information is out in the open doesn’t necessarily mean anything will happen to correct the problem, which is par for the course in government. The agency watchdog suggests convening a “working group” to find ways for the BOP to manage its medical costs and recommends that the agency improve the collection and analysis of data for inmate medical care. This will buy time, but it’s unlikely to result in any concrete action to cut the waste.

In the meantime federal inmates will continue to receive special treatment as long as Obama lives in the White House. Obama is the first sitting president to visit a federal prison and meet with inmates as part of his criminal justice reform movement. In 2010 the commander-in-chief proudly signed a law that, for the first time in decades, relaxed drug-crime sentences he claimed discriminated against minority offenders. Last year the administration released thousands of drug convicts from federal prisons around the country whose sentences were too long. In the aftermath of that mass release, the administration has spent huge amounts of taxpayer funds to help the prematurely discharged convicts reintegrate into society. This includes housing and job programs.