Since 1973, the Social Security Act has mandated that states provide retroactive Medicaid benefits for three months prior to the individual’s application.  SSA § 1902(a)(34).  Congress enacted this provision to provide coverage to those lacking knowledge about their Medicaid eligibility and to those whose sudden illness prevented them from applying.  Senate Report No. 92-1230, at 209 (Sept. 26, 1972).  Providers benefit from retroactive eligibility through the ability to enroll uninsured patients in Medicaid retroactively, including after discharge, to avoid uncompensated care costs.

Seeking to trim Medicaid expenditures, Iowa’s Governor this year signed a law requiring the State to seek a CMS waiver from the retroactive eligibility requirement.  When the State agency asked the public for comments on its waiver proposal, only one commenter expressed support.  The vast majority expressed concern that many patients—especially trauma patients who might lack the ability to promptly file Medicaid applications—would face new coverage gaps.  The State itself projected that the waiver would shed 3,000 members (monthly) and would slash Medicaid expenditures by $36.8 million (annually).  Providers unsurprisingly voiced concern that the waiver would increase uncompensated care costs. Continue reading…