Seen In: Fortress (1992)
On the surface, Fortress has everything one might expect from a dystopic-American-future prison system: lasers instead of bars, cyborg guards instead of human ones, and even dream monitoring. But this one crosses the line from scary to disturbing in a few ways, and we're not just talking about the "intestinators" - electronic bombs/shock devices inmates are forced to swallow upon entry.
The main reason both the hero and his wife are incarcerated is their desire to deliver a second child (the first had died), deemed illegal due to overpopulation. Illegal mothers are held prisoner until the baby is born, at which point the child becomes property of the MenTel Corporation, the same company that owns the prison. Why would a privatized prison want newborns? So they can turn them into cyborg guards to patrol the facility in the future.