State Spotlights – How 1115 Waivers Are Powering Transformation
While recent federal guidance signals a narrowing of scope for Medicaid’s Section 1115 demonstration authority, it’s important to recognize how that authority has already been used—boldly and creatively—by states to serve people in more effective, equitable, and person-centered ways.
This post spotlights how several states have deployed 1115 waivers to address social determinants of health, reduce institutionalization, and expand community-based care models. These programs are not theoretical—they’re making measurable impacts in the lives of Medicaid beneficiaries and their families. But with federal funding restrictions now on the horizon, their sustainability is in question.
Oregon – Expanding Medicaid to Cover Rent and Climate Support
What They Did:
Oregon’s 2022 waiver renewal allows Medicaid to cover up to six months of rent, air conditioning units, and food support for individuals experiencing homelessness, transitioning from incarceration, or at risk of institutionalization.
Why It Matters:
These supports address the direct link between housing stability and health outcomes—especially critical for those with chronic conditions or behavioral health needs.
What’s at Risk:
Without continued CMS matching, these services may disappear. Beneficiaries could face disrupted housing during vulnerable transitions, families may become default safety nets, and the state could see a rise in hospitalizations and institutional care costs.
North Carolina – Healthy Opportunities Pilots (HOP)
What They Did:
Through its Medicaid managed care transformation, North Carolina launched the Healthy Opportunities Pilots, covering services like housing navigation, healthy food boxes, transportation, and violence intervention for high-risk enrollees.
Why It Matters:
These pilots are among the most robust attempts in the nation to test whether reimbursing non-clinical services can drive better health outcomes and reduce costs.
What’s at Risk:
If CMS restricts matching for non-medical services, the program may not scale—and could even contract—jeopardizing North Carolina’s broader Medicaid reform goals and health equity commitments.
California – CalAIM’s Enhanced Care Management and Community Supports
What They Did:
CalAIM (California Advancing and Innovating Medi-Cal) uses waiver authority to fund Enhanced Care Management (ECM) and a suite of Community Supports, including:
Medically tailored meals
Sobering centers
Housing transition services
Asthma remediation
Why It Matters:
CalAIM targets high-utilizing populations with complex needs, coordinating services across housing, behavioral health, and primary care.
What’s at Risk:
Losing matching funds could unravel California’s integrated care model, strain provider networks, and result in poorer outcomes for those most in need of comprehensive supports.
Massachusetts – Flexible Services via ACOs
What They Did:
Massachusetts allows Medicaid ACOs to offer non-traditional health-related services, such as help with utilities, home modifications, and food security interventions.
Why It Matters:
This waiver allows ACOs to tailor supports to the unique needs of individuals, especially those with disabilities and dual-eligibility.
What’s at Risk:
If these supports no longer qualify for federal matching, ACOs may pull back on these offerings, shifting costs and complexity to families and primary care teams.
Washington – Foundational Community Supports and IMD Flexibility
What They Did:
Washington offers tenancy support and employment navigation services through Foundational Community Supports. Its waiver also includes an IMD (Institutions for Mental Diseases) exclusion waiver, allowing Medicaid to fund short-term stays in mental health facilities.
Why It Matters:
These services help individuals with serious mental illness find and maintain housing while receiving timely behavioral health care.
What’s at Risk:
Without matching funds, states may be forced to end tenancy support programs and may again be prohibited from covering short-term psychiatric care—leading to more emergency department use, homelessness, or incarceration for people in crisis.
Vermont – All-Payer ACO Model Integration
What They Did:
Vermont’s waiver integrates Medicaid into its All-Payer ACO Model, aligning incentives across Medicare, Medicaid, and commercial insurers to support value-based care.
Why It Matters:
This model helps small, rural systems deliver whole-person care with shared accountability for outcomes, particularly for complex care patients.
What’s at Risk:
If Medicaid demonstration support is scaled back, Vermont may be unable to sustain its multi-payer alignment, potentially undermining years of value-based care investment.
What These Examples Tell Us
Each of these states has gone beyond the minimum Medicaid requirements to proactively meet the needs of their populations—often focusing on:
Addressing social and economic risk factors
Improving care transitions
Preventing avoidable institutionalization
Centering equity and dignity in care
But none of these innovations are untouchable. As CMS rolls back eligibility for federal match under 1115 authority, states may be forced to reduce or eliminate services that don’t fall within Medicaid’s narrower “core mission.”
Key Takeaway
Section 1115 demonstrations have allowed states to build creative, person-centered systems of care. They’ve supported new workforce models, non-traditional care settings, and SDOH interventions that reflect how people actually experience health. But these models are now under threat—not because they’ve failed, but because the financial structures that supported them may no longer qualify for federal match.
Coming up next, we’ll look at what happens when these programs lose funding—who pays the price, and what it means for state Medicaid systems trying to deliver on the promise of aging in place, health equity, and long-term sustainability.
