Understanding Medicaid Waivers: 1115, 1915(b), and 1915(c)

Is a Medicaid Waiver?

At its simplest, a Medicaid waiver is a tool states can use when they want to operate their program in a way that isn’t otherwise permitted under the Medicaid statute. But "waiver" is a broad term. The authority a state uses depends heavily on what the state is trying to accomplish. The three waiver types discussed during the Summit—1115, 1915(b) and 1915(c)—each have different purposes, requirements, and populations they can serve.

Section 1115 Demonstrations

Section 1115 waivers are generally used for experimental, pilot, or demonstration projects. They give states flexibility to test approaches that may not otherwise fit within traditional Medicaid requirements. Among other things, Section 1115 authority can be used to waive certain requirements related to statewideness, comparability and freedom of choice of provider.

Historically, budget neutrality has been a central standard for Section 1115 demonstrations. However, the federal policy environment is changing significantly, with new budget neutrality requirements taking effect in 2027.

That makes Section 1115 particularly important to watch as states evaluate existing demonstrations and consider future changes. And the scale of Section 1115 is substantial. According to the Summit discussion, 47 states currently operate at least one Section 1115 waiver, while in some states, Section 1115 authority accounts for the vast majority of federal Medicaid spending.

Section 1915(b) Waivers

Section 1915(b) waivers serve a different purpose. These waivers can be used for mandatory managed care systems or restricted provider networks. Rather than focusing on experimental demonstrations, the authority provides states with flexibility around how certain Medicaid services are delivered. The standard associated with Section 1915(b) waivers is cost effectiveness.

The Summit discussion also highlighted differences in the review and approval timelines for 1915(b) and 1115 waivers. Section 1915(b) waivers generally have a two-year duration and are renewed in two-year increments (up to five years if they include people dually enrolled in Medicare and Medicaid), while Section 1115 demonstrations are typically approved for five years.

The distinction matters because the type of waiver a state chooses can affect both the flexibility available to the state and the administrative process required to maintain that authority.

Section 1915(c) Waivers

Section 1915(c) waivers focus on home- and community-based services. These waivers serve populations that meet an institutional level-of-care requirement, including certain aged or disabled populations and individuals with intellectual or developmental disabilities or serious mental illness.

One of the most important characteristics of 1915(c) waivers is that participation can be capped. Unlike many traditional Medicaid benefits, 1915(c) waiver services are not an entitlement. States can limit enrollment based on available resources, which is one reason individuals may face waiting lists for home- and community-based services.

That distinction can have significant implications when states face budget pressure. During the Summit, speakers noted that controlling the budget for 1915(c) waivers can mean limiting enrollment, and that budget constraints can contribute to longer waiting lists.

How Does a State Choose?

The right waiver authority depends on what the state is trying to accomplish. As discussed during the Summit, a practical approach is to use the least burdensome authority that is appropriate for the policy objective while considering how far the state needs to move outside traditional Medicaid rules. That means there isn't one "best" waiver.

For example:

State plan amendments may be appropriate when federal law already lets states make a change through their state plan, without a waiver. 

Section 1915(b) may be appropriate when a state is addressing managed care delivery systems or restricted provider networks.

Section 1915(c) is designed for home- and community-based services and specific populations that meet institutional level-of-care requirements.

Section 1115 is generally used when a state wants to test an experimental, pilot, or demonstration approach.

The goal is to match the authority to the policy objective.

Why the Distinctions Matter More Now

Understanding the differences among these authorities is more than an academic exercise. The federal policy changes discussed at the Summit are creating new fiscal and operational considerations for states. Section 1115 demonstrations, in particular, are moving into a significantly different environment beginning in 2027.

At the same time, states continue to face decisions about how best to structure programs, deliver services, and respond to changing federal requirements. For Medicaid stakeholders, understanding which authority is being used—and why—is an important first step in understanding how a state program may change. As Medicaid continues to evolve, the ability to identify the right authority for the right policy objective will remain an important part of state program strategy.

This article draws on discussion from Module 1 of the 2026 Advantage+ Medicaid Policy Summit. Interested in viewing our Summit recordings? Register here for on-demand access and CE.