States use Section 1115 Medicaid demonstration waivers to test new program approaches. These tools allow states to deviate from federal statutes if the HHS Secretary believes the plan will further the goals of the Medicaid program.
These waivers provide more flexibility than current law generally allows. Nearly all states have at least one active Section 1115 waiver, and some states have multiple 1115 waivers.
The HHS Secretary can determine if the proposed approach is likely to promote the objectives of the Medicaid program before granting approval. Priorities often shift based on state needs and the goals of the sitting presidential administration.
New Federal Rules for Eligibility and Work
The 2025 tax and spending law includes provisions affecting current retroactive eligibility and premium policy and introduces mandatory work requirements for ACA expansion adults.
Beginning October 2028, states will be prohibited from requiring enrollment fees or premiums for ACA expansion adults.
Retroactive coverage will also change on January 1, 2027. It will be limited to one month for ACA expansion enrollees and two months for traditional enrollees.
Currently, the policy provides three months of retroactive coverage across different eligibility groups. Maryland waives this for a specific optional group of low-income children, while Utah does the same for enrollees receiving premium subsidies for COBRA or ESI coverage.
Beginning January 2027, all states will be required to condition Medicaid eligibility for ACA expansion adults on meeting work requirements.
States have the option to implement requirements sooner through a state plan amendment (SPA) or through an approved 1115 waiver.
Nebraska will begin enforcing these federal work requirements on May 1, 2026.
Montana plans to start on July 1, 2026.
Iowa will follow on December 1, 2026.
Arkansas announced a “soft implementation” for July 1, 2026, but the state will not disenroll anyone before the January 1, 2027 federal deadline.
Georgia is currently the only state with an active work requirement waiver. The Georgia waiver expires on December 31, 2026. The state must then comply with the new federal rules.
Since the administration began, several states have submitted waivers for work requirements. Most will not move forward with those specific requests now that federal requirements are law.
Legal challenges have also hit other states. In June 2024, a U.S. District Court vacated the approval for the Healthy Indiana Plan 2.0.
The ruling removed Indiana’s authority to charge premiums beyond what is allowed under federal law, waive retroactive eligibility, and waive provision of non-emergency medical transportation (NEMT).
The Indiana Family and Social Services Administration has appealed this decision to the D.C. Circuit Court.
Administrative Shifts and Pre-release Coverage
The administration took steps to phase out or withdraw Medicaid premium requirements. This applied to requirements approved under 1115 authority for Michigan, Montana, Wisconsin, and Arkansas. Other key initiatives under the administration included waivers for multi-year continuous eligibility for children.
CMS developed a standard demonstration application and special terms and conditions to expedite pre-release waiver requests for individuals who are incarcerated. To date, no pre-release waivers have been approved.
Social Determinants of Health
In March 2025, the administration rescinded guidance on health-related social needs, or HRSN. This action does not negate existing approvals. CMS will now consider state applications for these services and supports on a case-by-case basis. CMS previously announced a Section 1115 demonstration waiver opportunity to expand tools for addressing HRSN in 2022.
The agency issued a detailed framework and informational bulletin in 2023 and updated them in 2024. Certain states requested infrastructure or capacity building funds to support the delivery of new services. Others requested changes to eligibility criteria for approved social determinants of health services. Other supports may include case management, non-medical transportation, postpartum supports, and supports for toxic stress and interpersonal violence.
