Until 1984 Federal regulations allowed correctional institutions to bill for health services provided to incarcerated youths who were eligible for Medicaid for the month of their arrests and the month of their discharge. After 1984 the regulations were changed to disallow any Federal reimbursement for health services to incarcerated individuals. This action shifted the responsibility for financing needed health care entirely to local governments. Owing to a reduction in Federal funding, this has resulted in inequities in the quality of care available to youth. Children in public facilities, compared to private facilities, are mostly poor, minority, and from dysfunctional families. They are particularly hurt by their ineligibility for health care funding; children in private facilities, on the other hand, continue to be eligible for Medicaid. Children admitted to public correctional facilities have substantial existing physical and emotional problems caused by a variety of factors. Unless they receive appropriate health care while under the jurisdiction of correctional services, they will return to the community with health problems that may place the community as well as the juvenile at risk of harm. 2 references