Proposed changes to Medicaid’s retroactive eligibility policy could leave low-income cancer patients facing unexpected medical bills in the thousands, according to a study published in JAMA Network Open.

The research, led by Aaron Dawes, MD, PhD, an assistant professor in Stanford University’s department of surgery, examined how provisions in the One Big Beautiful Bill Act (OBBBA) would affect patients who enrolled in Medicaid at the time of a new gastrointestinal cancer diagnosis.

Since 1972, Medicaid has been required to cover medical services received by individuals who were eligible but not yet enrolled in the program – a feature known as retroactive eligibility. Currently, most states cover services received up to 90 days before enrollment, providing a safety net for people who are unaware of their eligibility or unable to apply immediately due to the severity of their illness.

The OBBBA would reduce this window to 30 days for expansion enrollees and 60 days for traditional enrollees.

Patient financial impact

The Stanford research team analyzed data from 22,342 patients with newly diagnosed gastrointestinal cancers in California between 2016 and 2019. Of these, 1,553 patients (6.9%) met the criteria for retroactive eligibility – meaning they were eligible but not enrolled in Medicaid at the time of their cancer diagnosis.

The findings indicate potential financial implications:

• Traditional enrollees would face an additional $9,766 to $72,559 in out-of-pocket costs under the new policy
• Expansion enrollees would be responsible for $16,472 to $114,885 in additional expenses

“Even our lowest estimates represent a substantial burden to low-income families,” the researchers noted, pointing out that half of Americans report being unable to pay an unexpected medical bill over $500.

Beyond the impact on individual patients, the researchers warn of potential ripple effects throughout the healthcare system. For patients, unpaid medical bills contribute to “financial toxicity,” including medical debt, poor credit ratings, and increased financial instability for families already struggling economically. The policy change may also place additional burden on small rural hospitals, which already shoulder a disproportionate share of uncompensated cancer care costs.

Broader healthcare effects

Several states that have already limited retroactive eligibility provide a potential example for what to expect nationwide.

“Florida, Arizona, and Iowa already have a 0-day retroactive period, while Massachusetts and Hawaii have a 10-day period,” he said. “In the limited evaluations of these programs, it looks like medical debt increased and operating margins decreased at safety net facilities without any substantial change in enrollment.”

The research team urged both patients and healthcare practitioners to be aware of these impending changes and to prioritize timely Medicaid enrollment whenever possible.

“Practitioners must be aware of these changes and, when possible, prioritize enrollment assistance programs and special avenues for enrollment,” said Dawes, “… particularly hospitals that will be the most affected by this and other Medicaid cuts, such as safety net facilities and hospitals that currently see a large portion of Medicaid patients.”

Even our lowest estimates represent a substantial burden to low-income families.

Aaron DawesAssistant Professor of Surgery

Dawes says the researchers focused on gastrointestinal cancers because “they are unexpected, expensive, and require inpatient care.” He noted that breast and cervical cancer care are covered under a special national program that provides effective emergency Medicaid coverage for these individuals and pushes for early detection.

“I expect individuals with unexpected health issues that require costly medical interventions will be the most affected by these changes,” said Dawes. “That includes patients with significant traumatic injuries, myocardial infarctions, or strokes, especially if they become incapacitated and unable to enroll within the new shortened windows.”