Retroactive coverage ensures that someone who is eligible for Medicaid but unenrolled at the time of incurring a health care expense (such as a hospital bill) and is subsequently enrolled can have those expenses covered for 90 days before the official start of enrollment, according to this report from the Center for Children and Families at the Georgetown University McCourt School of Public Policy.
Retroactive coverage is needed because it takes time for states to enroll eligible people after they apply. It also protects people and providers from incurring uncompensated costs when patients need care in a hospital or nursing home. For example, a person who has a stroke would need time to do the paperwork needed to apply for Medicaid, the report noted.