A Medicaid waiver is a formal approval that lets a state bypass certain federal Medicaid rules to run its program differently. Every state operates at least one. The federal government sets baseline requirements for Medicaid, but states can request permission from the U.S. Department of Health and Human Services to waive specific requirements, giving them flexibility to try new approaches, limit provider choices, or offer services that standard Medicaid doesn’t cover.
The term “waiver” comes up most often when people are looking into home care for an elderly or disabled family member, but waivers actually shape how Medicaid works at every level, from who qualifies to how care gets delivered.
Why Waivers Exist
Federal Medicaid law creates a floor: a set of minimum benefits, eligibility rules, and protections that every state must follow. But states have wildly different populations, budgets, and health care systems. A waiver lets a state ask the federal government, “Can we do this part differently?” If approved, the state can design programs tailored to its own needs without losing federal funding.
The authority for these waivers comes from specific sections of the Social Security Act. The most common types are Section 1915(b), Section 1915(c), and Section 1115 waivers, each named after the legal provision that authorizes them. They serve different purposes, and most states run several at the same time.
Section 1915(c): Home and Community-Based Services
This is the waiver type most people encounter personally. Section 1915(c) waivers let states pay for care that helps people stay in their homes or communities instead of moving into a nursing home or other institution. Without the waiver, Medicaid would generally only cover institutional care for many of these individuals.
The services available under these waivers go well beyond traditional medical care. States can offer case management, personal care aides, home health aides, adult day programs, respite care (temporary relief for family caregivers), habilitation services, and homemaker assistance. States can also propose custom services, like home modifications or transportation, that help keep someone out of an institution.
To qualify, a person must meet two sets of criteria. First, they need to be financially eligible for Medicaid, with income and assets below state-defined thresholds. Second, they must need the same level of care they would get in a nursing facility or similar institution. States verify this through a functional assessment, which is typically a face-to-face interview conducted in the person’s home by a state health department worker, an aging agency representative, or a contracted assessor. The interview evaluates physical and cognitive abilities and also identifies environmental needs like wheelchair ramps or grab bars. If the person qualifies, that same assessment often feeds into a care plan outlining which specific services they’ll receive.
Waitlists Are Common
Demand for these waivers far exceeds available slots in most states. As of 2025, more than 600,000 people are on waiting lists or interest lists for home and community-based services nationwide. The average wait is about 32 months, though this varies enormously by state and by the specific waiver program. That number has improved slightly from 40 months in 2024, but a wait of two to three years remains typical. Getting on a waitlist early matters, because spots generally open on a first-come, first-served basis.
Section 1915(b): Managed Care Waivers
Standard Medicaid gives enrollees the right to see any provider who accepts Medicaid. Section 1915(b) waivers let states override that “freedom of choice” requirement. They’re often called freedom-of-choice waivers for exactly this reason.
In practice, these waivers allow states to require Medicaid enrollees to join a managed care plan or use a primary care case manager who coordinates their care. States can also use them to limit which providers deliver certain services, like behavioral health or medical transportation. The goal is usually to control costs and coordinate care more effectively, though critics point out it can also limit access if networks are too narrow.
Section 1115: Demonstration Waivers
Section 1115 waivers are the broadest and most flexible. They give states permission to run “experimental, pilot, or demonstration” projects that test new policy ideas while still drawing federal Medicaid dollars. These can reshape eligibility rules, benefit packages, or how care is delivered in ways the other waiver types can’t.
States have used Section 1115 waivers to expand Medicaid coverage to populations not traditionally eligible, to test work-related requirements for enrollees, and to fund substance use treatment programs that wouldn’t otherwise qualify for Medicaid reimbursement. The key constraint is budget neutrality: the federal government will not approve a Section 1115 demonstration unless it expects to spend no more than it would have without the waiver. This means states proposing to cover new populations or benefits must find offsetting savings elsewhere in their Medicaid program.
Policy priorities at the federal level directly shape what gets approved. In mid-2025, the Centers for Medicare and Medicaid Services signaled it would stop approving new proposals for expanded continuous eligibility for certain populations and would not approve new workforce-related initiatives, while continuing to monitor results of those already running.
How States Combine Waivers
States frequently stack multiple waiver types to build more complex programs. One of the most common combinations pairs a 1915(b) managed care waiver with a 1915(c) home and community-based services waiver. This lets a state deliver home care services to elderly or disabled enrollees through a managed care organization rather than traditional fee-for-service Medicaid. The state must meet every federal requirement for both waiver types simultaneously, including proving cost effectiveness for the managed care component and cost neutrality for the home care component.
Other combinations exist as well. Some states pair voluntary managed care authority with 1915(c) waivers, while others use mandatory enrollment authority for certain populations. The practical effect for enrollees is that their home and community-based services get coordinated through a managed care plan, which can simplify care coordination but also means working within that plan’s provider network.
How Waivers Get Approved and Renewed
States apply for waivers through the Centers for Medicare and Medicaid Services. The initial approval period for a 1915(c) waiver lasts three years from its effective date. After that, the state can request five-year extensions, which CMS grants unless it finds the state failed to meet its required assurances during the previous period. If a state tries to add a new group of beneficiaries through an extension request, CMS treats that as two separate actions: an extension for the existing group and a brand-new waiver application for the new group.
Section 1115 demonstrations also have defined approval periods and require renewal. Because these are framed as experiments, CMS expects states to evaluate outcomes and demonstrate that the program is meeting its stated goals before extending it.
What This Means if You’re Applying
If you or a family member needs long-term care at home, a 1915(c) waiver is likely what you’re looking for. The starting point is your state’s Medicaid office or a local aging and disability resource center. They can tell you which waiver programs operate in your state, what the current waitlist looks like, and how to begin the application process.
Expect two hurdles. The financial eligibility check will look at income and assets. The functional assessment, done in person at home, will determine whether the care needed rises to the level that would otherwise require a nursing facility. If both are met and a slot is available, a care coordinator will develop a service plan. If no slot is available, you’ll be placed on a waitlist. Given that waits average nearly three years nationally, applying as soon as a need becomes apparent gives you the best chance of receiving services before the situation becomes a crisis.