A 1115 waiver is a federal approval that lets states run their Medicaid programs differently than federal law normally requires. Authorized under Section 1115 of the Social Security Act, these waivers give states flexibility to test new approaches to health coverage, as long as the experiments don’t cost the federal government more than standard Medicaid would. States have used them to cover everything from substance use treatment in residential facilities to housing assistance and nutrition support for vulnerable populations.
How 1115 Waivers Work
Medicaid operates under a set of federal rules that every state must follow. Section 1115 creates an exception: the Secretary of Health and Human Services can waive specific federal requirements so a state can run an “experimental, pilot, or demonstration project” that promotes Medicaid’s core objectives. In practice, this means a state can change who qualifies for coverage, what services are covered, or how care is delivered in ways that would otherwise violate federal law.
The tradeoff is oversight. The federal government approves 1115 waivers for an initial five-year period. States can then request extensions of three to five years, depending on the populations involved, and commonly receive additional five-year renewals after that. Throughout the life of a waiver, states must submit evaluation designs, interim reports, and final summative evaluations proving the demonstration actually worked. Federal regulations spell out requirements for hypotheses, data sources, and comparison strategies so the results hold up to scrutiny.
The Budget Neutrality Rule
The federal government will not approve a 1115 waiver unless it expects the project to be “budget neutral.” This means the waiver cannot result in higher Medicaid costs to the federal government than what those costs would have been without the waiver. States must project their spending under both scenarios, and the specific parameters of this budget test are written into each waiver’s approval letter and special terms and conditions. Budget neutrality is the single biggest constraint on what states can do with a 1115 waiver: any new benefit or expanded eligibility has to be offset somewhere else, either through savings in other parts of the program or by limiting who qualifies for the new services.
What States Use Them For
Substance Use and Mental Health Treatment
One of the most common uses of 1115 waivers is paying for addiction treatment in residential facilities. Federal Medicaid law generally prohibits payments to “institutions for mental diseases,” which are facilities with more than 16 beds that primarily treat mental health or substance use conditions. This restriction has been a major barrier to residential addiction care. Through 1115 waivers, states can bypass that rule and cover short-term inpatient and residential treatment for substance use disorders.
These waivers come with significant strings attached. Within 12 months of approval, a state must assess the availability of Medicaid-enrolled providers across every level of care, from outpatient services to medically supervised withdrawal management. Within 24 months, residential providers must meet nationally recognized program standards and offer patients access to medication-assisted treatment. States must also implement opioid prescribing guidelines, expand access to naloxone for overdose reversal, improve prescription drug monitoring programs, and ensure that residential facilities connect patients with community-based supports after discharge.
Housing and Nutrition Support
Some states have used 1115 waivers to address the social factors that drive poor health outcomes. On the nutrition side, approved services have included medically tailored meals (up to three per day, delivered to a person’s home for up to six months), fruit and vegetable prescriptions, protein boxes, and nutrition counseling including healthy meal preparation education. Meals and pantry stocking have been available specifically for children under 21 and pregnant individuals.
Housing supports have been broader than many people realize. Approved services have included up to six months of rent or temporary housing for people transitioning out of institutional care, people experiencing homelessness, and youth aging out of the foster care system. States have also covered one-time moving costs (security deposits, first month’s rent, utility activation fees, movers), home accessibility modifications for medical needs, pest and mold removal, and housing transition navigation services like individualized case management and eviction prevention.
The landscape for these services is shifting. In March 2025, CMS rescinded earlier guidance that had encouraged states to pursue social-needs waivers and announced it would evaluate applications for these services on a case-by-case basis. A July 2025 executive order directed an end to federal support for “housing first” policies that don’t promote treatment, recovery, and self-sufficiency. CMS also announced the phaseout of a funding mechanism called Designated State Health Programs that some states had used to support these services.
Reentry Services for Incarcerated People
Federal law prohibits Medicaid from paying for health care while someone is incarcerated. Through 1115 waivers, states can now cover services for people who are approaching release, starting before they leave the facility. The goal is to prevent the gap in care that typically occurs when someone walks out of a jail or prison with untreated chronic conditions, no prescriptions, and no connection to a provider. These demonstrations test whether starting care coordination, treatment, and coverage pre-release leads to better health outcomes and smoother transitions back into the community.
Continuous Eligibility for Children
Several states have received approval to guarantee multi-year continuous Medicaid coverage for young children, typically from birth through age six. Normally, children can lose Medicaid coverage if their family’s income fluctuates above the eligibility threshold, even briefly. Continuous eligibility waivers prevent those coverage gaps by locking in a child’s enrollment for multiple years regardless of income changes. However, CMS announced in 2025 that waivers focused on continuous eligibility would no longer be approved or extended.
The Application Process
Getting a 1115 waiver approved involves layers of public input before the federal government even sees the application. A state must provide at least a 30-day public notice and comment period that includes a detailed description of the proposed waiver, information on where to review it, and instructions for submitting written comments by mail or email. The state must also hold at least two public hearings on separate dates and at separate locations, giving residents across the state a chance to weigh in. These hearings must occur at least 20 days before the state submits its application to CMS.
States with federally recognized Indian tribes must consult with those tribes and seek advice from Indian health programs and urban Indian health organizations before submitting any waiver that would directly affect them. Once CMS receives a completed application, it has 15 days to acknowledge receipt publicly on its website and notify the state in writing.
How 1115 Waivers Differ From Other Medicaid Waivers
Medicaid has several types of waivers, and the differences matter. Section 1915(b) waivers let states require Medicaid enrollees to use managed care plans or limit their choice of providers. Section 1915(c) waivers allow states to cover home and community-based services for people who would otherwise need institutional care, like nursing homes. Both are narrower tools designed for specific purposes within Medicaid’s existing framework.
Section 1115 waivers are the broadest and most flexible option. They can waive nearly any provision of the Medicaid statute, as long as the project promotes Medicaid’s objectives. This is why states turn to 1115 waivers for the kinds of large-scale experiments that don’t fit neatly into other waiver categories: covering entirely new populations, testing new benefit designs, or addressing social needs that fall outside traditional medical care. The scope of what a state can propose is limited mainly by the budget neutrality requirement and the political priorities of whoever is running CMS at the time.