Retroactive Medicaid: Benefits, Eligibility and the Application Process
Table of Contents
Last Updated: Jan 08, 2025
Introduction
Some seniors may need long-term care coverage before they can enroll in Medicaid. They could have an unexpected illness or traumatic event. Maybe there was a delay in completing their Medicaid application. Or perhaps the response from the state took longer than anticipated. In situations like these, Retroactive Medicaid can help cover some of the unexpected long-term care expenses.
What is Retroactive Medicaid?
Retroactive Medicaid will cover Medicaid applicants’ long-term care expenses for up to three months prior to their application date, as long as they were eligible during that time. For example, Wanda is living in a nursing home, runs out of money in June but doesn’t apply for Medicaid until September. She is approved in September, so Medicaid will cover her nursing home bills in that month, and Retroactive Medicaid will cover her nursing home expenses for the three months prior – August, July and June – as long as she was also eligible during those months.
The state will cover unpaid bills via Retroactive Medicaid, as we just mentioned, and it can also reimburse seniors who paid out-of-pocket for expenses. However, there can be delays and complications when it comes to reimbursements, so Medicaid applicants and their families are advised to avoid paying long-term care bills that might eventually be covered by Medicaid, if possible. The difficulty here is that nursing homes and other long-term caregivers may not be willing to provide services without some kind of immediate payment.
Retroactive Medicaid can be especially helpful for seniors who have a sudden need for long-term care after a traumatic event like a stroke or heart attack. In situations like this, the senior will likely need care before it’s possible to complete a Medicaid application and receive approval from the state, which takes more than five months on average in our experience. This means that beneficiaries will either need to pay out-of-pocket for long-term care during that time, or find a nursing home or caregiver that will provide benefits contingent on future payment. In either case, retroactive coverage will prove valuable by reimbursing for out-of-pocket payments or covering unpaid bills from up to three months before the Medicaid application date.
What Expenses are Covered by Retroactive Medicaid
Medicaid is known for its nursing home coverage, but it will also pay for long-term care benefits in beneficiary’s homes, including assisted living residences in some cases. This in-home coverage is provided by either Home and Community Based Services (HCBS) Waivers, or regular state Medicaid for seniors, which is also known as Aged, Blind and Disabled (ABD) Medicaid.
Retroactive Medicaid is most commonly used to cover nursing home expenses, but in some states retroactive coverage can also be used in conjunction with HCBS Waivers or ABD Medicaid to cover in-home expenses.
In Nursing Homes
Medicaid covers all basic expenses associated with living and receiving care in a nursing home, so Retroactive Medicaid will cover the same for qualified applicants. This includes all room and board expenses, as well as skilled nursing care, 24-hour supervision, physician’s visits, prescription medication, medication management, social activities and personal care assistance with the Activities of Daily Living (mobility, bathing, dressing, eating, toileting). Some nursing home expenses Medicaid will not cover include a private room, comfort items and specialized food or care, unless they’re deemed medically necessary.
At Home
Medicaid’s in-home coverage via HCBS Waivers or ABD Medicaid can vary greatly depending on the state and the program, so Retroactive Medicaid’s coverage will also vary greatly by state. And, as mentioned, not all states offer retroactive coverage for HCBS Waivers or ABD Medicaid beneficiaries.
The in-home long-term care covered by HCBS Waivers or ABD Medicaid, depending on the state and program, might include:
• Personal care assistance with the Activities of Daily Living (mobility, bathing, dressing, eating, toileting)
• Assistance with the Instrumental Activities of Daily Living (cleaning, shopping, cooking, laundry, paying bills, medication management, etc.)
• In-home nursing services
• Meal delivery
• Transportation
• Home modifications for safety and accessibility
• Vehicle modifications
• Personal Emergency Response Systems
How to Qualify for Retroactive Medicaid
Medicaid long-term care applicants can qualify for retroactive coverage for up to three months prior to their application if 1) their application is accepted and 2) they were eligible for Medicaid during the three-month time.
To be eligible for Medicaid long-term care, individuals must meet financial and medical requirements. The financial criteria can vary by state, Medicaid program and the applicant’s marital status.
In most states in 2025, the individual asset limit for Nursing Home Medicaid and HCBS Waivers is $2,000, and the individual income limit for both programs is $2,901/month. The individual income limit for ABD Medicaid is also $2,000 in most states in 2025, but the income limit ranges from $967/month to $1,795/month.
Again, these financial limits can change depending on state, program and marital status. Plus, the rules that govern how and which finances are counted toward these limits, and which are exempt, can be complex and also vary by state. Seniors who are over their limits, or have a complex financial situation, can work with a Certified Medicaid Planner.
The medical requirements for Nursing Home Medicaid, and most HCBS Waivers, is needing a Nursing Facility Level of Care (NFLOC). This means the type of full-time care and supervision normally associated with a nursing home, but exactly how a NFLOC is defined and measured can vary by state. To be eligible for long-term care benefits via ABD Medicaid, applicants must show a medical need for each specific benefit, but they are not required to need a NFLOC.
State Variations in Retroactive Medicaid Policies
Retroactive Medicaid does not apply to all programs in every state. While it is available to Nursing Home Medicaid beneficiaries in most states, that’s not the case in Florida or Arizona, where retroactive coverage is limited to pregnant women and minors (children under 21 in Florida and under 19 in Arizona).
The rules for Retroactive Medicaid can also change frequently. Iowa, for example, eliminated retroactive nursing home coverage in 2018, but then reinstated it the next year.
To find out the rules in your state, contact your local Medicaid agency or consult with a professional.
How to Apply for Retroactive Medicaid
The application process for Retroactive Medicaid can also change depending on the applicant’s state of residence. In some states, the applicant simply checks off a box on the primary Medicaid application. Other state require a separate document to apply for retroactive coverage.
Applicants in every state do have to prove they met Medicaid’s eligibility requirements during the time they are applying for retroactive coverage, whether its the full three months before the application date or just some of it. They will do this with official documents that detail their financial holdings. Some or all of these documents may be needed for the primary Medicaid application, but there may be extra documents needed for the retroactive coverage.
Qualifying and applying for Medicaid can be complicated, with or without Retroactive Medicaid. Many seniors and their families need help with the process, and we can provide that help at Eldercare Resource Planning.