What is Medicaid Retroactive Eligibility, How It Works & Who Is Eligible

Medicaid will pay for long term care for up to 3 months prior to the date of one’s application, under a program called Retroactive Eligibility. That means low-income individuals who need full-time nursing care, for example, can move into a nursing home before they apply for Medicaid, and then the Nursing Home Medicaid program will pay expenses from up to three months before the application was submitted, as long as the applicant would have been eligible during that period. Retroactive eligibility is also for recipients of Aged, Blind and Disabled (ABD) Medicaid and Home and Community Based Services (HCBS) waivers, though unfortunately this is not true in every state.


What is Retroactive Eligibility for Medicaid Long Term Care?

Medicaid Long Term Care is for people who are older or have a chronic illness and are considered low-income in their state of residence. It covers all the costs of living in a nursing home. And for people who need some nursing care but want to stay in their own homes or assisted living communities, other Medicaid Long Term Care programs (ABD Medicaid and HCBS waivers) will cover costs including meals, transportation, and help with activities of daily living like eating and bathing.

But what if one is Medicaid eligible (meaning low-income) but has to move into a nursing home or begins getting medical bills before applying for Medicaid benefits? Retroactive eligibility is meant to work like a safety net to pay for medical and personal care expenses in the months before applying for Medicaid.

The complicated standards involving income and assets make it a time-consuming process to apply for Medicaid, and sometimes care needs can come on too quickly. Retroactive eligibility helps someone going through this process know that even if bills are piling up the program can pay them when it finally kicks in.

 For step-by-step guides through the process for applying for Medicaid Long Term Care, follow these links:
Nursing Home Medicaid
Home and Community Based Services Medicaid Waivers
Aged, Blind and Disabled Medicaid (also called Regular Medicaid)


Retroactive Eligibility for Nursing Home Care

Retroactive eligibility is often useful for people who receive Nursing Home Care through their state’s Medicaid program. A sudden change in condition or unexpected move into a nursing home can be incredibly difficult and expensive (usually more than $7,000 per month), and Medicaid’s retroactive eligibility makes the move easier.

With retroactive eligibility, someone in the process of applying for Medicaid doesn’t need to stress about bills piling up before they can complete the application. In other words, if one has to unexpectedly move into a nursing home and finds they cannot afford the cost, retroactive eligibility makes it possible to apply for Medicaid Long Term Care and get those bills paid retroactively by the state’s Medicaid program. Medicaid will cover unpaid bills going back three months via retroactive eligibility, and in some states it will cover paid bills, meaning the eligible applicant is reimbursed.

Because income and asset limits come into play, one who has assets above the state’s limits might spend those savings on the cost of long-term care, and if they run out of money to cover bills and then apply for Medicaid, the program will retroactively cover bills accrued during the process of applying. In other words, someone paying privately for care in a nursing home might become eligible for Medicaid later in their stay, and retroactive eligibility can keep them covered during that gap between running out of personal finances and being accepted by state Medicaid (as long as it’s 3 months or less).

 Important: While retroactive Medicaid may cover the cost of nursing home care for 90 days prior, it may be difficult to find a nursing home that will allow an individual to move in while they are “Medicaid pending” with the hope that they will be approved by Medicaid, and the nursing home will be reimbursed. Often, families must pay out-of-pocket and hope for reimbursement.


Retroactive Eligibility for Regular Medicaid and Medicaid Waivers

Low-income applicants in nursing homes can usually be retroactively eligible if they meet the criteria described above, but there is a lot more variance for retroactive eligibility with the other Medicaid Long Term Care programs: ABD Medicaid and HCBS waivers.

The power for states to change retroactive eligibility for these programs comes from Section 1115 Demonstration Waivers that provide flexibility for tweaking Medicaid rules, including eliminating retroactive eligibility under certain programs.

Some states have eliminated retroactive eligibility for all programs except Nursing Home Medicaid, which would mean it’s not available for people who need ABD Medicaid or waivers to cover long-term care services and supports in their own homes or assisted living communities.


How States Differ on Retroactive Eligibility for Medicaid

Which states have eliminated retroactive eligibility for Medicaid Long Term Care? The specifics are constantly changing for reasons including legal challenges. Broadly, 27 states have adjusted their retroactive eligibility rules. In the case of some states (including Florida, Oregon, and Wisconsin), retroactive eligibility can only provide coverage going back as far as the first day of the month the application was completed, rather than three whole months. In other states, like Massachusetts, retroactive eligibility only provided coverage for 10 days prior to the application date (though the COVID-19 pandemic caused Massachusetts to reinstate the 3-month retroactive coverage window).

States including New York and California, on the other hand, have kept the 3-month retroactive eligibility for all their Medicaid programs.

Changes to retroactive eligibility are constantly being updated. To get the latest information on whether one’s own state offers retroactive eligibility, it’s a good idea to contact the nearest Medicaid office (click here) and ask directly.


Which Types of Care Can be Covered by Retroactive Eligibility?

Retroactive eligibility can cover all the expenses Medicaid normally covers for three months prior to the application date if one was eligible over that time period. As stated above, this is not true in every state and the rules for retroactive eligibility have changed repeatedly in some states, but it generally applies to all expenses in a nursing home.

Other benefits covered under retroactive eligibility would include the following home-based services for recipients of ABD Medicaid or HCBS Medicaid waivers (though, again, there is variance from state-to-state):
– Help with activities of daily living
– Personal care services
– Durable medical equipment including wheelchairs and walkers
– Hospice care
– Prescription medications
– Medication management
– Meal delivery
– Transportation to doctor appointments

This is not a complete list of services, and there can be a lot of differences in Medicaid Long Term Care coverage from state to state.

For more on Medicaid Long Term Care benefits at home, click here. And follow this link for a list of Long Term Care services available in assisted living.


Who is Eligible for Retroactive Eligibility?

Being eligible for Medicaid requires income and assets below a certain amount. In most states, this means that one’s monthly income is below $2,523 per month (in 2022) and countable assets—including money in bank accounts—are below $2,000, though remember these numbers can vary depending on one’s marriage status, state of residence, and many other factors.

For state-specific Medicaid Long Term Care eligibility requirements, click here. In order to be retroactively eligible, someone must meet these criteria up to three months prior to actually applying. (Keep in mind that with Nursing Home Medicaid, a Medicaid applicant must also be assessed for physical/medical need by a professional working for the state.)

 If a senior dies with unpaid medical bills, it is possible to file for retroactive eligibility on their behalf if they met the state’s criteria for Medicaid.


What’s the Process to Apply for Retroactive Medicaid Eligibility?

How one gets retroactive eligibility to cover their bills from the months before applying for Medicaid will depend on the state. Every state has a different method for approving Medicaid Long Term Care benefits; retroactive eligibility may be as simple as checking a box on the form, or it might require filing a completely separate document.

To be approved for retroactive Medicaid eligibility, an applicant will need to provide documented proof that they were eligible for Medicaid (based on state criteria) during the period before applying. Functional and financial need might both require bank statements and doctors’ notes, but again it depends on the state.