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Looking Ahead to HR1: Retroactive Medicaid Coverage is Shrinking

Pamela Putnam Silver

H.R. 1, the federal budget bill passed in 2025, will shorten Medicaid's retroactive coverage period starting January 1, 2027. This change shrinks the window in which Medicaid can pay medical bills a person incurred before they applied. More people, and the providers who treated them, will be left with unpaid bills as a result.

What's changing

Today, people who apply for Medicaid can get coverage for medical bills from up to three months before the month they applied, as long as they met eligibility requirements during those months.

For applications submitted on or after January 1, 2027, that look-back period will drop to one or two months, depending on the person's eligibility category:

  • One month for adults in the Medicaid expansion group, which covers people ages 19–64 with income at or below 138% of the federal poverty level.
  • Two months for people in all other Medicaid eligibility categories.
     

Applications submitted before January 1, 2027 keep the full three months of retroactive coverage, even if the County Assistance Office hasn't processed them by that date.

Why the change matters

Retroactive coverage is a critical safety net for people who are uninsured or underinsured when an unexpected illness or injury lands them in the hospital or requires ongoing treatment. It is especially important for nursing home and rehabilitation residents. They often build up large bills while gathering the documents a Medicaid application requires. Retroactive coverage also protects health care providers, because it lets them focus on a patient's urgent medical needs first and deal with payment later. With a shorter window, more of these costs will fall on patients and providers.

What isn't changing: reconsideration periods

H.R. 1 does not change the reconsideration periods that apply when a Medicaid application or renewal is denied for missing paperwork. If the person submits the missing information within the reconsideration period, the County Assistance Office can "reconsider" the case and approve benefits without requiring a new application. 

DHS has clarified how this works under H.R. 1:

  • New applications: The reconsideration period stays at 60 days. The original application date is still used to set the retroactive period.
  • Renewals: The reconsideration period stays at 90 days. However, a new eligibility period starts on the date the missing information is received, and that date sets the retroactive period. This means that if missing renewal information is received on or after January 1, 2027, the shorter retroactive period applies.