What is a Medicaid Waiver?

Under the Social Security Act, several sections allow states to waive government-mandated requirements which pertain to Medicaid under certain circumstances. When a state uses this tool, it is known as a “Medicaid waiver.” Medicaid waivers are designed to allow states to be more flexible in providing health care options to their citizens, allowing states to save money and patients to have more freedom of choice. Sections 1115, 1915(b), and 1915(c) all contain specific information about different types of Medicaid waivers and how they work.

For consumers, the most important type of waiver is the 1915(c). This type of Medicaid waiver promotes the use of community-based services as an alternative to institution. If a patient is deemed suitable for institutionalization due to psychiatric illness, developmental disability, or chronic disease, the patient or the patient's advocates can request a 1915(c) waiver to get access to community-based care, allowing the patient to remain at home rather then needing to reside in an institution.

If the application for the waiver is approved, the patient will have access to home health care and other health care services which originate in the community. Medicaid may pay the patient an allowance to cover his or her medical care, or it may pay specific providers, depending on the state and the situation.

Patients often benefit from a 1915(c) Medicaid waiver, because the waiver allows patients to select their own health care providers and it empowers patients to make choices about where and when they receive care. Advocates for people with developmental disabilities in particular have taken advantage of the Medicaid waiver program to encourage community-based care for people who would otherwise be kept in institutions, arguing that staying in the community is better for the patient. Medicaid waivers also allow people to receive skilled nursing at home, and provide access to other services which would normally be limited under the Medicaid statutes.

A 1115 Medicaid waiver allows states to waive the rules for demonstration and pilot studies. These waivers are provided on the grounds that additional research and the development of advanced health care techniques can give patients access to better care, and possibly save money in the long term by creating alternatives to traditional care. 1915(b) waivers are used by states to limit freedom of choice, allowing states to enroll patients in special managed care programs which may not be available across the state and thereby creating a situation in which patients can have access to special services. 1915(b) and 1915(c) waivers are sometimes used together to create more services and options for patients.