This is the case that stunned California. It allows the federal court to require that the state reduce prison overcrowding by, obviously, reducing the prison population. I suspect that everyone (Republicans, Democrats, me) expected that the Supremes would overturn the lower court decision. After all, prisoners aren't a favored population group and given the willingness of the Court to run roughshod over the rest of us, no one expected that decision. California's prison overcrowding (and the consequent denial of medical treatment) was so egregious that even a very moderate court wasn't willing to countenance it.
A bit of background. California's prisons have been overcrowded for a long time. Democrats would argue that it's because Republicans gained a great deal of political favor with the electorate by being "tough on crime." And that's true. But it's also true that the Democrats didn't fight very hard. In fact, they didn't fight at all. So our state's political leadership reformed prison sentencing by lengthening them to Jim Crow state standards, changed the law to make it difficult for the mentally ill to avoid said long prison sentences, and generally insured that lots more people who were a lot sicker would go to prison for long periods of time. The voters joined in, most notably with the "three strikes" ballot initiative, which has on occasion, sent people to prison for 25 years to life for stealing a pizza.
By 1990 the prison situation was becoming intolerable. Prisons were seriously overcrowded, prisoners with physical health problems weren't getting needed treatment, and the increasing number of prisoners who had serious mental health problems was stretching the system beyond breaking. The federal court spent a long time trying to deal with the issues, but finally concluded that the prisons were too crowded to afford adequate medical care to inmates and that the solution was to reduce the number of prisoners. Other options were, of course, to build more prisons and hire more medical staff, but the prison system already consumes a disproportionate share of California's budget, and there are relatively few medical professionals who want to practice in prisons at all, particularly in prisons in remote areas.
It's unlikely that simply reducing the prison population will solve the problem, of course. If the lowest-level offenders are released (which I think is the idea), the remaining prisoners, particularly those with mental health problems, may still not get the help they need. Caring for people who are psychotic in a prison setting isn't likely to improve their condition. And as the number of older prisoners grows, the prison geriatric wards will become progressively more crowded. Just as medical care will cost more as the population ages, medical care in prison will cost more as prisoners age.
What happens to the prisoners who are released? Some of them will be sent off to county jails to finish up their sentences. This means that some county prisoners will have to be released to make room for them, leaving aside the whole issue of how the state will pay for this. And the counties do expect to get paid. Until 2014, when medically-indigent adults go back on Medi-Cal, county hospitals will become responsible for the care of the released prisoners. County hospitals, which have been on the edge of bankruptcy since the Clinton-Gingrich budget agreement in the '90s, will bear the brunt of this, as the emergency room will become the treatment center of choice.
And it would have been more sensible to do this when the state economy was booming. At least then, ex-prisoners had a chance at a job. Today California's unemployment rate is 12% and people with long, stable employment histories (and no felony convictions) can't get jobs. So many of the former prisoners can't help but end up back in prison--they have no jobs, no stable housing...We're just setting ourselves up for the next installment.