By BRIAN STANLEY
Patients hoping to enroll in Medicaid face more bills, while Congress touts it as a cost savings. Hospitals must choose their stance.
Medicaid covers most of short- and long-term health care expenses for low-income, elderly, and/or disabled Americans. Until now, the program paid for care received up to three months before someone applied for Medicaid, as long as the person was eligible at that time. That grace period has long been a safety net for people who get sick before navigating the maze of Medicaid enrollment.
in a silence change Tucked into the “Big Beautiful Bill,” lawmakers narrow that window by one to two months, depending on the state.
Now for adults Medicaid expansion programsRetroactive coverage ends one month before enrollment. For traditional Medicaid enrollees, it’s two months.
The Congressional Budget Office estimates that this change will “save” the government billions about the next decade. But these “savings” do not reflect fewer diseases or better care. Rather, they are unpaid bills and costs that reach patients, nursing homes and other parts of the health care system.
These changes can affect any of us.
Any health problem can trigger a chain of care—hospitalization, rehabilitation, and then long-term nursing home confinement—that easily extends beyond 30 or 60 days. Under the new rules, that early care will be out of reach of Medicaid: Costs for the first month or two now fall directly on the patient or the facility.
Still, this change is especially detrimental to dual eligible beneficiaries. Americans with Medicare who become eligible for Medicaid enrollment (think older adults or people with disabilities) are at particular risk.
This scenario plays out often: a person has Medicare and then suffers an illness or injury that reduces their assets. They then become eligible for Medicaid, in addition to maintaining their Medicare enrollment. For these Americans, the change in the “Big Beautiful Bill” means they face significant bills while they wait for their Medicaid enrollment to be completed.
We know that this population, and realistically all Americans, suffer when retroactive coverage is taken away.
For example, some states Those who have tried to reduce eligibility deadlines on their own have had to reverse course for the obvious reason that care is expensive, and reducing the eligibility deadline only exacerbates problems for new dual eligibles and their loved ones.
Despite all this doom and gloom, hospitals have an opportunity to address many of the harms discussed here. While they can’t undo the eligibility problem created by Congress, they can decide who pays for it. Spoiler, it should be the 340B Drug Pricing Program.
The 340B program allows eligible hospitals to purchase outpatient medications at deep discounts and keep the difference when they are reimbursed at full price. Therefore, if an eligible hospital purchases a drug with a production cost of $30, but the drug generally costs $100, the hospital is reimbursed the full amount of $100, which is net $70.
These incomes, in billions At the national level, they are intended to take advantage of scarce resources and support the care of low-income patients. But that’s not always how it works.
Hospitals that qualify for the 340B program use the savings with broad variation. Some use it to expand clinics or community programs, while others simply absorb it as income.
The new limits on the Medicaid lookback period create a clear opportunity to put $340 billion to work where the need is undeniable. hospitals that qualify for 340B are federally funded safety net institutions that already serve many low-income Medicaid and Medicare populations. Redirecting a portion of its $340 billion profits to cover the medical costs of patients caught outside the new 30- or 60-day period would turn patients’ abstract “savings” into real protection.
Hospitals can put this into practice in several ways.
For example, they could establish a network-wide fund to absorb the uncovered portion of care for patients awaiting Medicaid enrollment. Social workers, doctors and nonprofit groups that help patients and their families transition to Medicaid or long-term care could be the arbiters of this plan, similar to how they are often gatekeepers to fuel or housing assistance funds. Alternatively, hospitals could pool all 340B funds at the end of the year and use a portion of them to cover patient-level expenses that arose from the window reduction.
Repurposing 340B funds is a simple way to avoid medical debt for patients who should have been eligible, and it is easily operational. For the hospital, this move would demonstrate a visible benefit to the community at a time when hospitals face increasing scrutiny for how little charity care they provide. Similarly, the measure would prevent hospital staff who work with families from dealing with this change, reducing the burden on staff and patients.
In the future, Congress could consider amending the 340B rules to require hospitals to set aside a portion of the funds for this purpose. Otherwise, hospitals may have little incentive to reuse these funds. It may not be realistic in this Congress, but it may gain traction in the future.
While this idea won’t erase all of the gaps left by the new eligibility rules, even redirecting a portion of 340B revenue to cover retroactive care would ensure that patients aren’t punished for the timing of their illness.
Brian Stanley is a senior policy analyst at the Boston University School of Public Health.
