In this mixed methods analysis, we examine the effects of Medicaid Section 1115 waivers of retroactive eligibility on beneficiaries and providers. We use data from qualitative interviews with stakeholders in five states that implemented these waivers and an analysis of hospitals’ Medicare Cost Report data. For decades, states have experimented with limiting or eliminating retroactive eligibility under these waivers. The most recently approved waivers apply retroactive eligibility restrictions more broadly than past waivers, magnifying concerns about their potential harmful effects. However, the available evidence documenting positive or negative impacts of these waivers on Medicaid beneficiaries and health care providers is limited, largely because of lagging and insufficient evaluations.
Our quantitative analysis with a limited number of states and sample size did not detect changes in uncompensated care among hospitals in states with retroactive eligibility waivers relative to those in a comparison group. However, changes to retroactive eligibility waivers after their implementation in our case study states, including new exemptions for certain enrollees, suggest the waivers may have had negative consequences. Though policies such as presumptive eligibility or streamlined eligibility may mitigate the negative impacts of waivers, they are not a substitute for full retroactive eligibility protections. Insufficient evidence to support either the benefits or harms of retroactive eligibility waivers suggests their implementation should be reconsidered and that Section 1115 waiver evaluation requirements should be better enforced.
This brief was corrected July 12, 2021. The period covered by retroactive eligibility is the 3 months before the month in which a Medicaid application is submitted. A previous version said the period covered is 90 days before the date on which an application is submitted.