During 2009, 730,000 prisoners were released from federal and state prisons--a 21 percent increase from the number of prisoners released in 2000. Poor health and poor health coverage have been major challenges for former prisoners trying to reintegrate into the community and find work. We discuss these challenges and the likely effect of recent federal legislation, including the Second Chance Act, the Mental Health Parity and Addiction Equity Act, and the Affordable Care Act. We estimated that with the implementation of health reform, up to 33.6 percent of inmates released annually--more than 245,000 people in 2009--could enroll in Medicaid. Similarly, we estimated that up to 23.5 percent of prisoners released annually-more than 172,000 people in 2009-could be eligible for federal tax credits to defray the cost of purchasing insurance from state health exchanges. This health insurance, combined with new substance abuse services and patient-centered medical home models, could dramatically improve the health and success of former inmates as they return to the community. States should consider several policy changes to ease prisoners' transitions, including suspending rather than terminating Medicaid benefits for offenders; incorporating corrections information into eligibility determination systems; aiming Medicaid outreach and enrollment efforts at prison inmates; and designing comprehensive approaches to meeting former prisoners' health care needs.