The Budget Reconciliation Act of 2025 (H.R. 1 or P.L. No. 119-12) makes numerous changes to Medicaid eligibility. One of these changes is shortening the period of retroactive eligibility for Medicaid applicants.
Beginning in January 2027, Medicaid retroactive eligibility will be limited to two months prior to the application month for most applicants, including people aged 65 and older and people with disabilities, and to one month prior to the application month for adults enrolled in Expansion Medicaid coverage.
Background: Medicaid Generally Has Offered Retroactive Eligibility Up to Three Months Prior to Application Month
Medicaid programs have long been able to provide coverage for up to three months prior to the month of application, provided that the person meets all eligibility standards for the months in question.[1] When this protection was established in 1972, the Senate Finance Committee noted that the provision would “protect[] persons who are eligible for [M]edicaid but do not apply for assistance until after they have received care, either because they did not know about the [M]edicaid eligibility requirements or because the sudden nature of their illness prevented their applying.”[2]
Effective in 2027, Medicaid Retroactive Eligibility Will Be Reduced to One Month (Medicaid Expansion) or Two Months (all other Medicaid programs)
H.R. 1 reduces the maximum retroactive eligibility period for applicants. Beginning in January 2027, Medicaid programs will be able to provide coverage only two months (rather than three months) prior to the month of application, again only to the extent that the person meets eligibility standards during the months in question. The rollback will be even greater in the case of Expansion Medicaid for adults under age 65 — for these Medicaid recipients, retroactive coverage will be available only for the single month preceding the application month.[3]
Common Retroactive Coverage Situations
Retroactive coverage is relevant in situations in which the person for whatever reason does not file an application until several months after first receiving health care. For example, retroactive coverage could be essential for a person hit by a car, or an individual who had a stroke, and then is hospitalized for weeks or months in serious condition. They might not be able to file a Medicaid application in the same month in which the accident occurred.
Another common situation under which retroactive coverage would be essential is when person admitted to a nursing facility believes wrongly that their expenses are being covered by Medicare, and doesn’t file a Medicaid application until several months later when they learn that Medicare is not paying, or is paying only in part.
Retroactive eligibility is also important due to the weeks or months that can be required to prepare a Medicaid application for older adults or people with disabilities, often when they need coverage for long-term care. The applicant commonly must submit the Medicaid application accompanied by five or more years of bank and investment records, along with (potentially) records from retirement accounts and insurance policies, title records for real property (sometimes in other states or countries), and documentation of significant expenditures and transfers from the previous five years. Compiling this information can require weeks or months, particularly when the applicant is living in a nursing facility; retroactive eligibility enables the applicant and any representative to compile necessary information and still obtain coverage starting with the month in which health care began.
Medicaid Coverage Start Date is not Affected by Length of Time State Takes to Process Application
While the reduction of retroactive coverage is unwelcome news for Medicaid applicants, it is important to recognize what it does and does not do. As discussed above, Medicaid programs will have less ability to cover months prior to the month of application. But, significantly, the change does not alter the long-standing rule that coverage determinations are based on the application month, rather than the month in which an application is approved.[4] Once an application is filed, the Medicaid program’s ability to offer coverage for a particular month is not affected by whether the Medicaid program takes (for example) one, three, nine, or even twelve months to issue an approval. (Note that federal law requires that state Medicaid programs process eligibility applications within 45 days, or 90 days when a disability determination is required, but states often fail to meet these standards.[5])
Assume, for example, that a person begins receiving health care in January 2027 and meets eligibility standards during that month, but doesn’t file an application until February 2027. Under the law as effective in January 2027, coverage will be able to be granted retroactive to January 2027, whether the application is ultimately approved in July or December 2027, or even (hypothetically) sometime in 2028 or 2029.
Advocacy Considerations
Advocates should push state Medicaid programs to provide consumers and service providers (such as hospitals and nursing facilities) with clear notice of retroactive coverage policies and the importance of filing applications promptly. Advocates should also examine how and when a person can request that a Medicaid program determine eligibility for retroactive coverage. Medicaid applications should specifically ask whether the applicant requests such retroactive coverage. For example, the California Medicaid application includes the question: “Does this person want Medi-Cal to help pay for any medical expenses in the last 3 months?”[6]
A Medicaid system should also allow a person to file a Medicaid application and then subsequently ask for consideration of retroactive coverage. California provides a specific form for this purpose.[7] Delaware and Mississippi allow requests for retroactive coverage to be filed at any time after the original application,[8] while some other states have deadlines ranging from six to twelve months after that time.[9]
At the direct-service level, advocates should emphasize to their clients the importance of applying promptly. Although it is preferable to submit an application that includes all supporting documents, it is better to file without documents (property or bank records, for example) if delay in obtaining the documents would jeopardize coverage months. Once an application is filed, supporting documents always can be submitted later. An initial application can include a statement, to the extent possible under the application system, that the applicant is compiling necessary documents and will submit them as soon as possible.
Additional Resources
Endnotes
42 U.S.C. § 1396a(a)(34). ↑
Senate Report No. 92-1230, at 209 (Sept. 26,1972) (discussing section 255 of H.R. 1 of 1972). ↑
Pub. L. 109-171, § 71112, 139 Stat. 72 (2025); 42 U.S.C. § 1396a(a)(34) (eff. January 1, 2027). ↑
42 C.F.R. § 435.915. ↑
42 C.F.R. § 435.912(c)(3). ↑
Cal. Dep’t of Health Care Servs., Application for Health Insurance, at 11. ↑
Cal. Dep’t of Health Care Servs., Supplement to Statement of Facts for Retroactive Coverage/Restoration. ↑
Delaware Social Services Manual, Del. Admin. Code 16-5000-5100, § 14920.3; 23 Miss. Admin. Code Pt. 101, R. 8.4(B)(5). ↑
Cal. Code Regs. tit. 22, § 50148(b) (one year from month of service); Mont. Combined Medicaid Assistance Policy Manual § 104-1 (within 365 days that provider has to submit bill); N.H. Admin. Rules, He-W680.02(b), 880.02(b); (9 months from first day of month of service); N.H. Medical Assistance Manual § 109.09 (same); N.M. Admin. Code § 8.206.600.12(A) (180 days from original application). ↑
