NC NEWSLINE – When people qualify for Medicaid after a medical emergency, the program can currently reach back up to three months to pay for care they received before they applied — a safeguard that often prevents a hospital stay or ambulance ride from turning into lifelong debt.
That protection is about to shrink.
Beginning in January 2027, federal changes will sharply limit how far back Medicaid can cover medical bills for newly approved enrollees.
For adults covered under Medicaid expansion — a group that now includes more than 700,000 North Carolinians — retroactive coverage will drop from three months to just one. Other Medicaid populations, including children, seniors and people with disabilities, will see the window reduced to two months.
State officials say the changes are largely outside North Carolina’s control, but consumer advocates, legal aid attorneys and hospital groups warn that the shorter timeline could leave patients and providers burdened by costs that Medicaid would previously have covered.
How retroactive coverage works — for now
Sarah Gregosky, chief operating officer for NC Medicaid, said the current rules allow people applying for Medicaid to request coverage for medical services they received before submitting their application, as long as they were qualified at the time they received care.
When an applicant requests retroactive coverage, the state reviews their eligibility month by month — both prospectively and retroactively — which can result in Medicaid paying claims for care that occurred as much as 90 days before the person ever realized they qualified.
“What’s going to happen is the periods in which we’re reviewing retrospectively, when folks indicate on their application, is going to shorten,” Gregosky said. “For our traditional Medicaid programs, […] folks will have a 60-day period that they can say, ‘Hey, I had medical claims. Can you review my eligibility in those months?’ And for our expansion population, it will be limited to the 30 days prior to eligibility.”
Gregosky said the state has little flexibility in how the change, part of the One Big Beautiful Bill Act signed into law last summer by President Donald Trump, is implemented.
“It’s largely prescribed by federal rules,” she said. “We don’t have discretion in extending that period.”
A safety net in case of emergency
Retroactive coverage is most commonly used by people who only realize they qualify for Medicaid after something goes wrong — a hospitalization, accidental injury or sudden illness that forces them into the health care system.
“Typically, folks who are looking for that retrospective coverage had some sort of event that is triggering them to apply,” Gregosky said.
Health care navigators who help people enroll in Medicaid say the three-month window has been crucial since North Carolina expanded the entitlement program to cover more low-income adults in 2023.
“That three months retroactive coverage has been a big lift for a lot of people who really need emergency services, [who] go in and are hospitalized for a certain amount of time and are not able to enroll before that,” said Nicholas Riggs, director of the NC Navigator Consortium. “Or they had some sort of life change or experience and just haven’t had a chance to get coverage.”
Riggs said navigators regularly work with people who assumed they weren’t eligible for Medicaid until a health crisis forced the issue.
That’s especially true, he said, for people who qualify through expansion, which raised the state’s strict income threshold for Medicaid. The measure opened up the program to many working adults with lower incomes who previously made too much money to qualify.
“A lot of folks deem that they’re ineligible for coverage, when the contrary is true,” Riggs said. “They would have been eligible the whole time.”
With less time for coverage to be applied retroactively, Riggs said even small delays or misunderstandings during the application process could carry far greater consequences for patients who qualify for Medicaid but don’t realize it until after an emergency.
“My biggest advice to folks is don’t wait to enroll,” he said. “If you have any change in eligibility, even if you don’t think that you’re eligible for coverage, try to enroll because you never know.”
The looming changes come as enrollment assistance resources are thinning. Riggs said federal funding cuts forced the NC Navigator Consortium to reduce its staff by about 25 percent last year, which limited the group’s capacity to help people understand their eligibility and complete applications.
“We are worried about being able to reach the number of people that we were before with so many policy changes going into effect,” he said, adding that the state’s need for navigators “has never been more critical.” Less room for mistakes
Attorneys at Pisgah Legal Services, a nonprofit law firm serving western North Carolina, are anticipating an increase in clients facing medical bills they would previously have been able to resolve through retroactive Medicaid coverage.
“If you’re not navigating eligibility and not navigating these systems and seeing what goes wrong, you could think, ‘Well, what’s the big deal between one month and three months?’” said Thomas Lodwick, a managing attorney at the firm who specializes in cases concerning health and income. “But the big deal is that stuff goes wrong all the time. Applications get lost. They get erroneously denied.”
Lodwick said the existing three-month window acts as a “buffer,” giving applicants time to identify and fix issues that might otherwise derail their enrollment after an expensive emergency.
“Even if something goes wrong the first time [they apply], you can kind of clean it up and get them covered for that same period, and then they can avoid a crushing medical debt,” Lodwick said. “Frankly, a lot of times it can take months for that initial application to get processed or for the person to even find out that they were denied.”
With that buffer shrinking, Lodwick said the financial consequences will not stop with patients.
“Realistically, if you’re visiting the ER in an ambulance and you’re someone who qualifies for Medicaid, you’re not going to be able to pay these thousands and thousands of dollars,” he said. “At some point, that means the hospitals and other emergency service providers are going to be providing uncompensated care, further straining their abilities to provide care to everyone.”
Shortened retroactive coverage, he added, “affects everybody who wants hospital or ambulance services that are well-funded and running as well as they can be.”
Hospitals brace for higher unpaid bills
When North Carolina became the 40th state to expand Medicaid in 2023 (Washington, D.C., has also expanded), lawmakers imposed a special tax on hospitals to help offset the cost of covering hundreds of thousands of newly eligible residents.
It was a worthwhile tradeoff for hospitals, which saw significant reductions in uncompensated care as more patients gained health insurance.
But advocates and hospital groups say the reduction in retroactive Medicaid coverage threatens to shift some of those costs back onto providers — particularly when patients qualify for Medicaid but miss the narrower retroactive window.
In a statement to NC Health News, the North Carolina Health Care Association said the changes are “likely to create additional administrative challenges” for the more than 130 hospitals it represents across the state.
“There is also a heightened risk of uncompensated care during potential administrative gaps,” an association spokesperson said. “Hospitals that serve a higher percentage of low-income individuals may feel these impacts more acutely, with smaller, community hospitals facing a disproportionate burden.”
Uncompensated care costs have contributed to the closure of nearly 200 financially struggling hospitals in rural communities across the United States. At least 12 rural hospitals in North Carolina have shuttered since 2010, according to data from the Cecil G. Sheps Center for Health Services Research at UNC Chapel Hill.
Cuts collide with other changes
Navigators and legal aid attorneys worry that the loss of retroactive coverage comes at the worst possible moment — just as new work requirements and reporting rules increase the risk of coverage lapses that people may not discover until they need emergency care.
“This is just another thing that we need to make sure that folks are aware of as they apply,” Gregosky said. “There’s a lot of changes that are going to happen for beneficiaries.”
The One Big Beautiful Bill law also introduces a federal work requirement for Medicaid. Beginning Jan. 1, 2027, many beneficiaries will be forced to prove they are working, volunteering or attending school for at least 80 hours a month to maintain benefits.
Advocates fear the work requirement will result in an untold number of beneficiaries losing coverage — not due to unemployment, but paperwork issues.
Most of the enrollees who will be subject to the requirement, which applies only to expansion beneficiaries, already have jobs, according to the N.C. Department of Health and Human Services. But technological limitations, language barriers and other challenges could prevent many from regularly submitting the documentation needed to confirm their employment status.
Lodwick said even brief lapses caused by missed notices, processing delays or confusion over the new rules could leave people uninsured when an emergency strikes, with fewer options to retroactively fix the problem afterward.
“You could be cut off and not know it, and then find out when you end up in the emergency room,” he said. “I think there are a lot of us who kind of use health care as needed and, fortunately, don’t need it very often. But then when you do, you really need that retro coverage to get you back on.”
