Section 1115 Waivers: The Mechanism States Use to Restrict (or Expand) Medicaid

Section 1115 of the Social Security Act grants the federal government authority to approve state "demonstration projects" that waive standard Medicaid rules. That clause has become the nation's primary mechanism for restructuring Medicaid. Under Trump, this mechanism accelerates. Work requirement waivers that Biden administration rejected are being re-approved. By March 2026, at least a dozen states have applied for new waivers to impose work requirements, premiums, copays, or time limits. The waivers aren't controversial in Congress—they're approved by HHS at the executive level. That means they can reverse as quickly as administrations change. But once implemented and enrollment drops, reversing them politically becomes difficult.

How Section 1115 Waivers Work: The Legal Mechanism

Federal law requires Medicaid to cover certain populations (children, pregnant women, elderly, disabled) and generally prevents states from imposing work requirements, copays, or time limits. Yet Congress also empowered the Secretary of Health and Human Services to waive these requirements "to permit the state to conduct a demonstration project likely to promote the objectives of the Medicaid statute." That broad language became a loophole. HHS interprets "demonstrate" to mean almost anything. A state applies for a waiver, proposing changes (work requirements, premiums, benefit restrictions). HHS approves or denies the waiver. If approved, the state implements the waiver for a 5-year period. At expiration, the state can reapply or let the waiver expire.

The approval process includes a mandatory public comment period (typically 30 days), but public comment rarely blocks approval. HHS weighs whether the waiver likely "promotes the objectives" of Medicaid. The Trump administration interprets that broadly (work requirements "promote" self-sufficiency, which the administration views as aligned with Medicaid objectives). The Biden administration interpreted it narrowly (work requirements don't promote Medicaid's goal of assuring medical assistance). That interpretation reversal is why the same waivers get approved and rejected across administrations.

Georgia's PATH Program: The First Work Requirement Waiver in Practice

Georgia is the only state currently implementing work requirements under a Section 1115 waiver (approved by Trump in 2019, reapproved by Biden with modifications in 2022, reapproved again by Trump in 2025). Georgia's program is called PATH (Providing a Healthy, Activated, and Thriving Community). Adults 19-64 must work 30 hours weekly (or equivalent community service, job training, or caregiving) to maintain coverage. Reported coverage loss: approximately 8,000-12,000 people annually due to failure to document work requirements or understand the reporting process.

The Georgia case illustrates the real problem. The requirement sounds reasonable (30 hours of work). In practice, it creates administrative barriers. Gig workers struggle to document hours. Caregivers (for children, elderly parents, disabled siblings) don't fit the work category. People with episodic illnesses miss documentation deadlines. The state's reporting system is burdensome. Many people lose coverage not because they don't work, but because they struggle with the paperwork. When they appeal, the process takes months. They've already gone without coverage and accumulated medical debt.

Which States Have Applied or Will Apply for Work Requirement Waivers in 2026

At least 12 states have active work requirement waivers or have applied for them: Arkansas (currently approved), Indiana, Kansas, Kentucky, Mississippi, Missouri, Ohio, Oklahoma, Tennessee, Utah, Virginia, and Wisconsin. Several non-expansion states (Texas, Florida, South Carolina, Wyoming) are considering work requirement waivers as a way to rationalize existing restrictive eligibility without technically cutting enrollment (they narrow who qualifies by creating administrative barriers rather than lowering income limits).

Some states are applying for waivers to impose premiums and copays on Medicaid beneficiaries—technically allowed under waivers, though caps exist. Other states propose time limits (coverage for 24-36 months, then re-enrollment required). These waivers face less litigation than work requirements but produce similar coverage loss through administrative confusion.

Arkansas's 18,000-Person Lesson: How Work Requirements Reduce Coverage

Arkansas was the first state to implement work requirements (2018, under a Trump-approved waiver). Within one year, approximately 18,000 beneficiaries lost coverage, primarily due to failure to document work hours or to use the reporting system correctly. Arkansas's experience is the evidence case for why work requirement waivers reduce coverage. The state's own reports found that administrative failures (missing deadlines, documentation issues, system glitches) were the primary reason for disenrollment, not that people stopped working. When the Biden administration came to power, Arkansas's waiver was under review and conditions were added (exemptions for disabled individuals, pregnant women, caregivers). But the coverage loss had already occurred, and many beneficiaries never re-enrolled because they'd already found alternative coverage or the process had become too complicated.

The Waiver Approval Process: Timeline and Public Comment

States submit waiver applications to CMS (Centers for Medicare and Medicaid Services). CMS has 30 days to determine whether the application is complete. If complete, a public comment period opens (typically 30 days). Beneficiaries, advocacy groups, and the public can submit comments. After the public comment period closes, CMS reviews comments and submits its analysis to the HHS Secretary. The Secretary approves or denies the waiver. If approved, the state typically begins implementation within 30-90 days. No legislation is needed. No congressional vote is required. The decision is made at the administrative level by the HHS Secretary.

Public comment periods are open to participation, but few beneficiaries or even patient advocates know about them. States don't advertise waivers widely. CMS notices are posted in the Federal Register, but that's not where most people look. Advocacy groups and legal aid organizations monitor the Federal Register and sometimes organize comment campaigns, but coverage is inconsistent. Many waivers are approved with minimal public awareness.

Waivers for Premiums, Copays, and Time Limits

Work requirements get the most attention, but other waivers are expanding. States can use waivers to impose premiums on Medicaid beneficiaries (requiring a monthly payment for coverage). Federal law caps premiums at 5% of household income, but states can propose premium structures that approach that cap. Copays are similarly restricted (capped at 5% of income). Time limits (coverage expires after 24-36 months; re-enrollment required) are another waiver category. These waivers produce coverage loss through different mechanisms than work requirements—people drop coverage because they can't afford premiums; coverage lapses due to time limits and re-enrollment complexity—but the result is identical: disenrollment.

Medicaid Expansion Waivers: Non-Expansion States Using Waivers to Expand

Some non-expansion states use Section 1115 waivers to expand Medicaid, but in modified form. Montana expanded to 100% of federal poverty (partial expansion) under a Section 1115 waiver with work requirements. Iowa used a waiver to expand with work requirements and premiums. These states expand coverage but simultaneously impose restrictions that reduce net coverage gains. Montana's expansion gave coverage to more people but excluded adults who couldn't document work. The expansion and restriction offset; net coverage gain is smaller than traditional ACA expansion.

Behavioral Health Waivers and LTSS Restructuring

Some waivers target specific populations or services. Behavioral health (mental health and substance use disorder) waivers sometimes restructure how states cover treatment—using waivers to carve mental health services out of mainstream Medicaid or place them in managed care. Long-term services and supports (LTSS) waivers allow states to restructure nursing home or home-based care coverage. These waivers are less visible than work requirement waivers but have significant impact on vulnerable populations (disabled elderly, people with serious mental illness).

Legal Challenges: Why Some Waivers Get Blocked

Work requirement waivers have been challenged in federal court. Courts have blocked several waivers (Vermont, New Hampshire, Kentucky, Arkansas) on the grounds that they don't actually "promote the objectives" of Medicaid if they result in net disenrollment without health benefits. But courts have also upheld some waivers, deferring to HHS interpretation. Legal precedent is uncertain. A waiver approved in one circuit court may be blocked in another. Until the Supreme Court resolves the question, states operate in a legal gray zone. This gray zone is where most 2026 waivers are being submitted.

The Larger Implication: Waivers as De Facto Medicaid Restructuring

Congress hasn't passed major Medicaid restructuring legislation (block grants, per capita caps) in 2026. Yet waivers allow states to restructure Medicaid administratively, one state at a time. If 12 states approve work requirement waivers, 4 states impose premiums, and 3 states implement time limits, the cumulative effect is nationwide Medicaid restructuring without a congressional vote. This distribution of power to states (through waivers) is the alternative to federal restructuring. Some argue waivers are good policy (federalism, states trying different approaches). Others argue they're a race to the bottom (states competing to restrict coverage). Either way, they're effective: waivers are expanding, coverage is being restricted, and the public barely notices because each waiver is state-specific and administrative.

What to Do If Your State Files a Waiver

Monitor your state Medicaid agency website and the Federal Register for waiver notices. When a waiver is filed, a public comment period opens. Submit a comment to CMS if you're concerned about work requirements, premiums, or benefit cuts. Contact your state representatives and senator and your local legal aid office. Join advocacy groups monitoring waivers in your state. If your state implements a waiver and you lose coverage due to administrative barriers (missing deadlines, documentation failures, work requirement disputes), appeal. Many states have weak appeal processes and expect beneficiaries won't use them. Appealing increases your chance of restoration and creates data that CMS uses to evaluate waiver impact.