What Are 1115 Waivers? This Policy Shift Affects Millions
- 01. What 1115 waivers do
- 02. How they work (process and limits)
- 03. Budget neutrality and evaluation
- 04. Historical context and recent trends
- 05. Who is affected and scale
- 06. Common criticisms and safeguards
- 07. Illustrative examples (state uses)
- 08. How to follow or evaluate a waiver
- 09. Quick facts and representative statistics
- 10. Practical implications for providers and enrollees
- 11. Where to read primary documents
- 12. Example timeline for a waiver application
- 13. Key takeaway paragraph
Section 1115 waivers are federal approvals that let states test changes to their Medicaid and CHIP programs by temporarily waiving certain federal rules so the state can try new ways to deliver and pay for care, and they must be budget-neutral to the federal government.
What 1115 waivers do
Section 1115 of the Social Security Act authorizes the Secretary of Health and Human Services to permit demonstration projects that waive specific Medicaid statutory requirements so states can pursue programmatic innovation and test policies designed to improve access, quality, or cost-effectiveness.
- Allow states to change who is covered (eligibility rules) as part of a demonstration.
- Permit states to modify benefit packages or introduce new services that federal rules wouldn't otherwise allow.
- Authorize alternative payment models and provider payment arrangements for Medicaid.
- Require a formal evaluation and public transparency during application and implementation.
How they work (process and limits)
States submit an application describing goals, design, and evaluation plans; CMS reviews public comment and either approves, requests changes, or denies the request.
- State designs waiver application with objectives, budget neutrality calculations, and evaluation metrics.
- State holds public notice and comment; application is transmitted to the federal agency for review.
- CMS approves or negotiates terms, typically for an initial five-year period with potential extensions (commonly three years).
Budget neutrality and evaluation
Every 1115 demonstration must show it will be budget-neutral to the federal government - meaning projected federal spending under the waiver cannot exceed what would have been spent without it - and must include an evaluation strategy and regular reporting requirements.
| Feature | Typical Content | Common Duration |
|---|---|---|
| Eligibility changes | Expand/limit covered groups or phase-in population eligibility | 5 years initial |
| Benefit design | Add non-traditional benefits (e.g., SDOH supports) | 5 years initial |
| Payment reform | Global payments, managed care innovation, value-based payments | 5-8 years |
| Evaluation | Independent evaluation plan, periodic reports, public dashboards | Ongoing for life of waiver |
Historical context and recent trends
Section 1115 waivers have been used since the 1960s to allow demonstration projects, but their use expanded dramatically in the 2000s when states sought flexibility for payment and coverage experiments; by the mid-2020s nearly every state had at least one active or recently concluded 1115 demonstration.
Policy priorities and the focus of approved waivers shifted across administrations: during one recent administration, many approvals emphasized financing changes and work requirements, while the next administration prioritized access, equity, behavioral health, and social-needs integration.
Who is affected and scale
Because Medicaid covers more than 70 million people nationally at various times, a major 1115 waiver can directly affect millions of enrollees through eligibility changes, benefit design, or provider networks.
Examples of state uses include expanding behavioral health services, piloting housing-support payments as allowable benefits, and testing managed-care payment models that align incentives across physical and behavioral health.
Common criticisms and safeguards
Critics warn that some 1115 waivers can reduce coverage or impose new barriers (such as premiums or lock-outs) if poorly designed; federal review and public comment periods act as safeguards but outcomes depend on CMS terms and the state's implementation.
"Demonstration projects must be likely to assist in promoting Medicaid objectives," a principle CMS cites when reviewing 1115 proposals.
Illustrative examples (state uses)
Illinois used a 1115 waiver to build a multi-year Behavioral Health Transformation program that expanded residential SUD services and authorized social-needs supports like non-medical transportation; CMS approved extensions and amendments to add health-related social needs in 2024.
Other states have used 1115 demonstrations to pilot whole-person care models, expand coverage pathways for pregnant people, and authorize state innovation in financing long-term services and supports.
How to follow or evaluate a waiver
To monitor an active or proposed 1115 waiver, consult the federal Medicaid demonstration list and the state's waiver docket for application documents, public comments, and periodic reports; CMS maintains a dynamic list of demonstrations and associated documents.
- Find the state's application and public notices on the state Medicaid website or regulatory docket.
- Check CMS's Section 1115 demonstration list for federal documents and approval letters.
- Review the state's required evaluation reports and any independent evaluations posted to public dashboards.
Quick facts and representative statistics
Approximately two dozen states had active or pending 1115 waivers containing social-determinants-of-health elements as of mid-2023, showing a trend toward integrating non-medical supports into Medicaid demonstrations.
Nearly every state has used 1115 authority at some point; active demonstrations often number in the dozens nationally when counting renewals and separate projects.
Practical implications for providers and enrollees
Providers should expect changes in payment rules, reporting requirements, and prior-authorization procedures under many demonstrations; enrollees may see expanded services or new administrative requirements depending on waiver design.
- Providers may need to adapt to bundled payments or new quality metrics.
- Enrollees should watch state notices for eligibility or cost-sharing changes.
Where to read primary documents
Primary sources include the CMS Section 1115 demonstration list and individual state Medicaid agency web pages that host waiver applications, public comments, and evaluation plans.
Example timeline for a waiver application
Below is an illustrative timeline for a typical 1115 waiver from concept to operation.
| Step | Description | Typical Duration |
|---|---|---|
| Design | State drafts application, budget neutrality model, and evaluation plan | 3-9 months |
| Public input | State posts notice, holds hearings, collects comments | 30-90 days |
| Federal review | CMS reviews, negotiates terms, issues approval letter | 3-6 months |
| Implementation | State phases in changes, updates provider manuals, enrollees notified | Variable |
Key takeaway paragraph
Section 1115 waivers are the federal mechanism that lets states experiment with Medicaid program design by waiving certain statutory provisions to pursue innovations that aim to improve access, quality, and efficiency while remaining budget-neutral to the federal government; because they can affect eligibility, benefits, and payment, they are closely watched by advocates, providers, and beneficiaries.
Everything you need to know about What Are 1115 Waivers This Policy Shift Affects Millions
Are 1115 waivers budget neutral?
Yes - by statute, demonstrations under Section 1115 must be budget-neutral to the federal government; states submit models showing projected federal spending under the waiver compared to a baseline without the waiver.
How long do 1115 waivers last?
Waivers are typically approved for an initial five-year term and can be extended or amended, often for additional three-year or five-year periods depending on CMS negotiation and evaluation results.
Can a waiver change who is eligible for Medicaid?
Yes - 1115 demonstrations can propose changes to eligibility, benefits, and cost-sharing rules for targeted populations as part of the demonstration design.
Do states have to publish evaluations?
Yes - states must include an evaluation strategy and make periodic reports public; CMS also posts demonstration documents and approvals for transparency.
How can I find my state's 1115 waiver?
Search the CMS demonstration list for your state and then review the state Medicaid website's waiver docket for application materials, public notices, and evaluation reports.
Will a new 1115 waiver automatically change my coverage?
Not automatically - changes take effect only if a state implements an approved waiver and follows the timeline and eligibility rules in the waiver's terms; affected enrollees should receive state notices and have appeal rights under Medicaid rules.
Who approves 1115 waivers?
The Secretary of Health and Human Services (through CMS) approves 1115 demonstration waivers after federal review and public comment.