South Carolina’s retroactive Medicaid eligibility change came through a federal Section 1115 waiver called Palmetto Pathways to Independence, which let the state shorten the standard three-month look-back period for a targeted group of non-disabled adults. Children, pregnant women, and people who qualify through age, blindness, or disability were never affected and kept the full three-month window. The original waiver expired on November 30, 2024, and a replacement application submitted to the Centers for Medicare and Medicaid Services on June 23, 2025, remains pending.1Medicaid.gov. Palmetto Pathways to Independence
The Federal Three-Month Rule the Waiver Changed
Federal Medicaid law requires every state to offer retroactive coverage for medical expenses incurred up to three months before the month a person files an application, as long as the applicant would have met the program’s income, residency, and other rules during those months.2Office of the Law Revision Counsel. 42 U.S. Code 1396a – State Plans for Medical Assistance The protection exists so patients who needed emergency or other medical treatment are not stuck with bills just because they had not yet applied.
When retroactive eligibility is confirmed, Medicaid pays the provider directly for covered services delivered during the look-back window. The applicant does not receive cash; the outstanding debt with the hospital or clinic is settled through the program.3Medicaid.gov. Eligibility Policy States can ask CMS for permission to shorten or waive the three-month period through a Section 1115 demonstration waiver, and that is the route South Carolina took.
What Palmetto Pathways to Independence Did
The South Carolina Department of Health and Human Services (SCDHHS), which runs the state’s Medicaid program under the name Healthy Connections, received CMS approval in December 2019 for the Palmetto Pathways to Independence demonstration.4Medicaid.gov. Palmetto Pathways to Independence Approval The waiver let the state create a targeted adult eligibility group and test new administrative frameworks, including community engagement activities as a condition of enrollment.
For the adults the waiver covered, mostly non-disabled parent and caretaker relatives with income at or below 62% of the federal poverty level, the retroactive coverage window was shortened from the standard three months.5SCDHHS. Program Eligibility and Income Limits The waiver ran from December 12, 2019, through November 30, 2024.4Medicaid.gov. Palmetto Pathways to Independence Approval
Where Things Stand Now
The original waiver expired on November 30, 2024. SCDHHS filed a new Section 1115 application with CMS on June 23, 2025, which again proposes community engagement qualifying activities that enrollees would need to meet. That application has not yet been approved.1Medicaid.gov. Palmetto Pathways to Independence
Because the waiver has lapsed and the replacement is still pending, the shortened retroactive window for affected adults may have reverted to the standard federal three-month period. Rules could shift again if CMS acts on the pending application. If your situation turns on exactly how far back coverage can reach, confirm the current rule with SCDHHS or your local eligibility office before relying on either timeframe.
Who Was Never Affected
Federal law protects several groups from any state-level shortening of retroactive coverage. These populations kept the full three-month look-back regardless of what the waiver did:
- Pregnant women who were pregnant during the retroactive period and had household income at or below 194% of the federal poverty level.
- Children under 19 whose family income was at or below 208% of the federal poverty level.
- People who qualify through the aged, blind, or disabled category, including those receiving Supplemental Security Income. Eligibility for this category is generally determined using SSI income methods rather than the modified adjusted gross income rules that apply to most other groups.
If you are not sure which category applies to you, SCDHHS publishes every eligibility group and its income threshold on its website.5SCDHHS. Program Eligibility and Income Limits
How to Request Retroactive Coverage
To ask Medicaid to cover bills from before your application date, complete DHHS Form 3400-C, “Request for Retroactive Medicaid Coverage.”6SCDHHS. Forms You can also flag the request directly on the main Healthy Connections application. Form 3400-C asks for the name, date of birth, and application ID of each household member seeking coverage; whether household size was the same during the three months before you applied; and your total monthly income for each of those months.
Expect to document what you report. Pay stubs or employer statements show your income stayed within program limits. Medical bills with dates of service help SCDHHS identify which providers to pay. A utility bill or lease can verify South Carolina residency. Submitting everything together up front avoids the back-and-forth that slows claims down.
SCDHHS accepts documents through its online upload tool, by mail to SCDHHS Central Mail, P.O. Box 100101, Columbia, SC 29202, by fax at 888-820-1204, or in person at a local eligibility office.7SC DHHS. Document Upload Tool Eligibility determinations generally take up to 45 days, with longer timelines for complex cases.8SCDHHS. FAQs
If approval comes through, SCDHHS pays enrolled providers directly at the Medicaid rate, and those providers cannot bill you for the difference between their standard charges and what Medicaid pays. If you already paid an enrolled provider out of pocket for services during the covered window, bring your approval notice to the billing department and ask them to submit the claim to Medicaid and refund what you paid.
If Your Request Is Denied
A denial comes with a written Notice of Decision that explains the reason and includes instructions for filing what SCDHHS calls a “fair hearing.”9SCDHHS. File an Appeal To appeal, submit a written statement describing what you disagree with and why, together with a copy of the denial notice.
Read the deadline on your notice carefully. Some notices run the 30-day clock from the date printed on the notice; others run it from the date you receive it.9SCDHHS. File an Appeal Federal rules bar states from giving fewer than 30 or more than 90 days from the mailing date to request a hearing.10eCFR. Subpart E – Fair Hearings for Applicants and Beneficiaries Common denial reasons include missing income documentation for one or more months, income over the program limit during the retroactive period, and unverified South Carolina residency. If the denial came from missing paperwork rather than actual ineligibility, gather what was missing before your hearing.