Medicaid HCBS Waiver Programs

Medicaid Home and Community-Based Services (HCBS) waivers let states cover long-term care in a person's home or community instead of an institution. The core authority, Section 1915(c) of the Social Security Act, has let states "waive" certain Medicaid rules to fund in-home care since Congress added it in 1983 ^[1].

A 1915(c) waiver targets a defined population — for example, older adults, people with physical disabilities, or people with intellectual and developmental disabilities — and covers services that standard Medicaid does not, such as personal care, homemaker services, respite, home modifications, and case management. To win CMS approval, a state must show the waiver is cost-neutral (average per-person waiver cost cannot exceed what institutional care would have cost), protect enrollees' health and welfare, apply reasonable provider standards, and deliver services under an individualized, person-centered plan of care. As of June 30, 2020 — the most recent national count published by CMS's LTSS Technical Assistance Center — there were 253 active 1915(c) waivers, 218 of which reported providing one or more personal care services, and 47 states plus DC operated at least one. 1915(c) is only one of several HCBS authorities. Section 1915(i) lets a state add HCBS as a regular state-plan benefit for people with incomes at or below 150% of the Federal Poverty Level without requiring an institutional level of care; 1915(j) authorizes self-directed personal assistance; 1915(k) Community First Choice provides attendant services and carries a six-percentage-point enhanced federal match; and Section 1115 demonstrations let states test alternative designs. Waiver programs are also bound by the HCBS settings and person-centered planning rules at 42 CFR 441.301, including conflict-free case management, which bars the provider of a person's direct services from also writing that person's service plan ^[2]. HCBS is where Medicaid long-term care dollars increasingly go: in 2023, HCBS accounted for $145.9 billion of $228.6 billion in total Medicaid LTSS spending, or 63.8%.

Waivers are the primary funding stream for non-medical home care, but they are administered state by state, so covered services, provider qualifications, billing units, and rates are defined in the specific waiver a provider contracts under — not by a national fee schedule. Waiver enrollment is capped and often waitlisted, which means census growth depends on the state's approved slot count, not on referral volume alone. The conflict-free case management rule matters commercially: if an agency also performs assessment or care planning, it may be barred from delivering the direct services in the same plan, which can force a make-or-buy decision about which line of business to keep. Because HCBS now carries the majority of Medicaid LTSS spending, states are actively managing utilization through prior authorization and EVV, and waiver-specific authorization variation means that treating all Medicaid intake the same produces authorization gaps across contracts.