What is a Section 1115 waiver? It is a waiver authority, created in the Social Security Amendments of 1962 and codified at 42 U.S.C. § 1315, under which the Secretary of Health and Human Services may let a state deviate from standard Medicaid rules for «experimental, pilot, or demonstration projects» that, in the Secretary's judgment, are «likely to assist in promoting the objectives» of the program. States have used it for work requirements, premium contributions, closed formularies, and delivery-system overhauls — and each administration has used the same undefined phrase to bless the opposite policies its predecessor approved, which is why several states' programs flip with every presidential transition.
How does a waiver get approved?
A state submits an application to the Centers for Medicare & Medicaid Services; the statute imposes a 30-day federal comment period and a public hearing process; CMS negotiates special terms and conditions — the contract that governs the demonstration — and approves, typically for five years. Waivers must be budget-neutral to the federal government: CMS computes a spending ceiling the demonstration cannot exceed, using a without-waiver baseline whose accounting methods have themselves become contested. Renewal is a fresh negotiation, and CMS has sometimes granted renewals with substantial changes over state objection.
What have the demonstrations covered?
- Coverage expansion precursors: before the ACA's expansion, waivers extended eligibility to populations the statute did not reach.
- Delivery reform: managed-care and value-based arrangements — including multibillion-dollar financing mechanisms like hospital and provider taxes — now run under waiver authority in several states.
- Eligibility conditions: work and community-engagement requirements, approved by one administration starting 2018, litigated in courts, withdrawn by the next, and approved again by the one after — the clearest illustration of the pendulum.
- Coverage limits: benefit carve-outs, time limits, and lockouts proposed or approved in various states' pending applications.
Where courts come in
Waivers are reviewable under the Administrative Procedure Act, and the major litigation has attacked the Secretary's judgment: in the work-requirement cases, federal courts (upheld on appeal in the D.C. Circuit) vacated approvals for failing to analyze coverage loss, holding the Secretary's reliance on the program's «objectives» arbitrary when tens of thousands would lose coverage. The doctrinal question — whose objectives, measured how — remains the fault line every new wave of approvals must cross.
Why the waivers matter for 2026 policy
Because they are the fastest lever: statutes move slowly, but a friendly Secretary can approve a state's application in months, and dozens of applications sit in CMS's queue at any moment. States line up their requests to whichever administration is in office — the pending docket, published by CMS, is therefore the best public map of where Medicaid policy is actually heading, whatever the budget debates produce.
FAQ
How long does a waiver last?
Usually five years (three for some renewals), after which the state must seek renewal or return to standard rules.
What does budget neutrality mean?
The demonstration cannot cost the federal government more than Medicaid would have spent without it, under a CMS-computed spending ceiling.
Have work requirements survived court review?
No — the major approvals were vacated for inadequate analysis of coverage loss; later attempts have faced the same test.
For more context, read How Congress Kills a Federal Rule in 60 Days.
For more context, read tariff authority.
For more context, read executive order.