The House of Representatives has narrowly passed a budget reconciliation bill that includes a controversial provision slashing the retroactive Medicaid eligibility window from 90 days to a mere 30 days. The move, part of a larger package aiming to cut over $700 billion in federal healthcare spending, has nursing home providers and patient advocates warning of dire consequences for both facilities and vulnerable older adults.
The bill, which saw a vote pushed to Thursday morning after 21 hours of intense negotiations, was ultimately approved, sending tremors through the long-term care industry. While the exact final provisions regarding Medicaid were not immediately clear post-vote, policy experts had largely anticipated the retroactive eligibility change would remain.
“It definitely has a chance of getting through, and the impact will be particularly difficult for people who have sudden illnesses,” said Stephanie Kennan, a senior vice president of McGuireWoods Consulting’s federal public affairs group, speaking prior to the vote. “While it will take a financial toll on operators in assisted living and skilled nursing facilities, it’s a problem for families as well. This aligns Medicaid with commercial insurance, but Medicaid is a safety net, not commercial insurance.”
The current law mandates states provide Medicaid coverage for qualified expenses for up to 90 days before the application date. The proposed 30-day window, if enacted, would become effective on October 1, 2026. This shortened period raises alarms for individuals experiencing sudden health crises, such as a stroke or an accident, who may be incapacitated and unable to navigate the complex Medicaid application process promptly. Nursing homes, in turn, fear being saddled with significant uncompensated care costs if admitted residents cannot secure timely Medicaid enrollment.
Deke Cateau, CEO of Atlanta-based long-term care provider A.G. Rhodes, painted a stark picture of the potential impact. “It would have a huge impact. Easily, 20% to 25% of our Medicaid residents come in under ‘Medicaid pending,’ which is what we call it,” Cateau stated. He added that the change would force his mission-driven organization, where about 70% of beds are currently filled with Medicaid patients, to “re-examine our business model” and potentially jeopardize non-mandated programs that enhance quality of life.
The Office of Management and Budget estimates this specific proposal will save $6.5 billion over 10 years. However, critics argue these savings come at a steep price for the most vulnerable.
“Looking at it from the patient perspective, I don’t think there’s a silver lining, and I don’t think for folks who own and operate nursing homes there’s a silver lining, either,” Kennan asserted.
While some states have experimented with shorter retroactive coverage periods through Section 1115 waivers – with 30 demonstration projects approved in 27 states as of August 2019 – stakeholders emphasize the unique challenges of a national policy. Georgia Goodman, LeadingAge’s director of Medicaid policy, acknowledged that Florida, for instance, has a waiver that eliminated retroactive coverage over time, but cautioned that nursing homes would still be responsible for costs beyond 30 days if application delays occur due to a patient’s inability to provide necessary documents.
“For people with a catastrophic event like a stroke, maybe that person is incapacitated and can’t sign. There’s a lot of pressure there,” Goodman said. She stressed that the change threatens “even more uncompensated care and liability for providers,” potentially leading to patients being “stuck in the hospital” as social workers scramble for suitable placements.
Looking ahead, providers are being urged to proactively adapt. “If this [proposal] moves forward, you’ll have to think of ways to amend policies to figure out Medicaid applications for just about anybody coming through the door as soon as possible, and for making conversations with families as early as possible,” Goodman advised. “Those applications have to start within 23 to 25 days so if the state seeks more information, you can be responsive and get the application on the books.”
The bill now moves to the Senate, where a significantly different version is anticipated to emerge, offering a glimmer of hope for providers and patient advocates. However, the House’s vote signals a clear intent to reshape Medicaid, with potentially profound and lasting impacts on the nursing home industry.