Hepatitis C virus (HCV) is highly prevalent in incarcerated populations. The high cost of HCV therapy places a major burden on correctional system healthcare budgets, but the burden of untreated HCV is not known. We investigated the economic impact of HCV through comparison of length of stay (LOS), frequency of 30-day readmission, and costs of hospitalizations in inmates with and without HCV using a 2004–2014 administrative claims database. Inmates with HCV had longer LOS, higher frequency of 30-day readmission, and increased cost of hospitalizations. Costs were higher in inmates with HCV even without advanced liver disease and in inmates with HIV/HCV compared to HCV alone. We conclude that although HCV treatment may not avert all of the observed increases in hospitalization, modest reductions in hospital utilization with HCV cure could help offset treatment costs. Policy discussions on HCV treatment in corrections should be informed by the costs of untreated HCV infection.