Medicaid waivers are federal permissions that let states change how their Medicaid programs normally work. Under standard Medicaid rules, states must follow a specific set of requirements about who they cover, what services they offer, and how care is delivered. A waiver lets a state set aside one or more of those rules to try a different approach, whether that’s providing home care instead of nursing home care, requiring managed care enrollment, or testing entirely new program designs. There are three main types, each with a different purpose and scope.
The Three Main Types of Waivers
Each waiver type comes from a different section of federal law and allows states to change different things about their programs.
Section 1915(b) waivers let states change how care is delivered. Medicaid normally guarantees that you can see any provider who accepts Medicaid, but a 1915(b) waiver allows a state to require enrollment in a managed care plan, limiting your provider choices outside of emergencies. States also use these waivers to run managed care in only part of the state rather than everywhere, or to offer enhanced benefits to people who enroll in certain plans. These waivers are approved for two years at a time, with two-year renewals.
Section 1915(c) waivers fund home and community-based services (HCBS) as an alternative to institutional care. Instead of a nursing home or residential facility, you receive support at home or in your community. These are approved for an initial three years, then renewed in five-year periods.
Section 1115 waivers are the broadest category. They give the federal government’s health secretary authority to approve “any experimental, pilot, or demonstration project” that could advance Medicaid’s goals. These projects typically operate statewide and affect large portions of a state’s Medicaid population. States have used them to expand eligibility to new groups, restructure entire delivery systems, and more recently, address factors like housing instability and food insecurity.
Home and Community-Based Services Waivers
The 1915(c) waiver is the one most people encounter when searching for help for a family member with a disability or an aging parent. Its core idea is straightforward: if someone would otherwise need to live in a nursing home or institutional facility, the state can instead pay for services that let them stay at home.
Standard services under these waivers include case management, homemaker assistance, home health aides, personal care attendants, adult day health programs, habilitation services (both daytime programs and residential support), and respite care, which gives family caregivers a temporary break. States can also propose additional services tailored to keeping people out of institutions, such as home modifications, assistive technology, or transportation to medical appointments.
What makes these waivers unusual within Medicaid is that states can target very specific groups. A state might run one waiver for people with intellectual and developmental disabilities, another for adults with physical disabilities, another for frail seniors over 65, and yet another for people with conditions like traumatic brain injury or HIV/AIDS. Each waiver can have its own set of covered services, its own eligibility criteria, and its own enrollment cap.
Who Qualifies for a Waiver
Eligibility for HCBS waivers involves two separate hurdles: financial and functional.
On the financial side, income and asset limits vary by state. California, for example, sets its asset limit at $130,000 for one person, with $65,000 added for each additional family member. Other states use different thresholds. For children with significant disabilities, many states offer what’s known as the Katie Beckett option, which allows a child to qualify for Medicaid based on their own medical needs rather than their parents’ income. This matters because many families earn too much for standard Medicaid but can’t afford the level of care their child requires.
The functional requirement is where things get more clinical. You need to demonstrate that you require an “institutional level of care,” meaning your needs are serious enough that you would otherwise qualify for placement in a nursing home or similar facility. States evaluate this through functional assessments that look at your ability to perform daily living activities (bathing, dressing, eating, mobility), instrumental activities like managing medications or preparing meals, cognitive function, behavioral health, and overall medical status. The specific assessment tools vary considerably from state to state.
Waitlists Are Common
Because states can cap enrollment in their HCBS waivers, demand often exceeds available slots. As of 2024, roughly 710,000 people were on waiting lists or interest lists nationwide. The average wait was 40 months, down from 45 months in 2021 but up slightly from 36 months in 2023.
A three-year-plus wait for services sounds alarming, and it is a real barrier. But most people on these lists are eligible for other types of Medicaid-covered home and community-based services while they wait. The waiver-specific services, like specialized habilitation programs or higher levels of personal care, are what’s delayed, not all support.
How Section 1115 Waivers Are Changing Medicaid
Section 1115 demonstration waivers have become the primary tool states use to reshape their Medicaid programs in significant ways. Because the federal authority is so broad, these waivers have been used for everything from expanding coverage to adults without children (before the Affordable Care Act made that standard) to testing work requirements for enrollees.
More recently, states have used 1115 waivers to address what public health researchers call health-related social needs: the non-medical factors that heavily influence health outcomes. In 2022, the Biden administration invited states to apply for waivers covering services related to housing instability, homelessness, and nutrition insecurity. Several states received approval to use Medicaid funds for things like temporary housing support, meal delivery, and help with utility costs.
In March 2025, the Trump administration rescinded the guidance that encouraged those applications. Existing approvals remain in place, but new requests for social-needs waivers will be evaluated individually rather than under a standardized framework. This means the landscape for these newer waivers is shifting, and what’s available depends heavily on when your state applied and what was approved.
The Budget Neutrality Rule
One constraint applies to nearly every waiver: the federal government will not approve a waiver that costs it more money than standard Medicaid would have. For Section 1115 and 1915(c) waivers, this is called budget neutrality. The state must demonstrate that total federal spending under the waiver won’t exceed what the government would have spent without it. For 1915(b) waivers, the requirement is slightly different: the program must be “cost-effective and efficient.”
This is why HCBS waivers can cap enrollment. If a state opens home-based services to everyone who qualifies, total costs could exceed what it would have spent on institutional care for the smaller number of people who actually entered nursing homes. The enrollment cap is a financial control that keeps the waiver within its approved budget. It’s also the direct reason those 710,000-person waitlists exist.
How Waivers Differ From State to State
Because waivers are individually negotiated between each state and the federal government, there is no single national Medicaid waiver program. Two neighboring states might cover very different services for very different populations under very different financial rules. One state might operate six or seven separate HCBS waivers targeting distinct groups, while another consolidates services into fewer, broader waivers.
Nevada, for example, runs separate waivers for individuals with intellectual and developmental disabilities, people with physical disabilities, frail elderly adults over 65, and a structured family caregiving program. Each has its own eligibility age ranges, level-of-care requirements, and service menus. Your state’s Medicaid agency website or a local disability rights organization is the most reliable source for which specific waivers operate where you live, what they cover, and how to apply.