To better understand Medicaid Waivers, it is helpful to start with an overview of the regular state Medicaid program. Medicaid is a jointly funded state and federal health care program for low-income persons of all ages. The rules governing Medicaid are federally set and require that all states provide assistance to specific groups of people, such as pregnant women, disabled persons, and seniors, who meet the eligibility requirements. All states must provide nursing facility and home health care for those that demonstrate a functional and financial need. However, each state sets their own income and asset limits within the government set parameters, which means eligibility criteria is not consistent across state Medicaid programs.
Medicaid Waivers, which are approved by the federal government, allow states even more flexibility to run their Medicaid programs. Waivers allow states to “waive” certain rules. They enable states to expand their coverage to specific groups of people, make certain benefits available only to select groups, limit coverage to specific geographic regions within the state, and test other ways to run their Medicaid programs.
Waivers can extend long-term home and community based services (HCBS) to seniors and disabled persons who require assistance to live at home or in the community. Care provided by Waivers may include attendant care, supervision, adult day care, respite care, and homemaker services. Prior to Waivers, the only option for long-term care may have been nursing home care.
Offering HCBS through Medicaid Waivers is ideal for both care recipients and their families. Most elderly people prefer to age at home or in their communities. Long-term care benefits through Waivers help to prevent and / or delay the need for nursing home care. Services and support provided via HCBS Waivers is commonly complimented by unpaid care assistance from family members or other loved ones. Assistance through HCBS Waivers takes some of the pressure off of family caregivers. It not only gives them a break from caregiving, but can also allow them to continue to work outside of the home and provides peace of mind knowing that their loved one is safe, supervised, and receiving needed care assistance. This arrangement is also beneficial for the state, as receiving care via Medicaid Waivers is more cost efficient than is nursing home care.
Many Medicaid Waivers allow for consumer direction, also called cash and counseling, or self-directed care. This allows care recipients to choose from whom they receive services. This often includes the ability to hire relatives. While not as common, some Waivers even allow spouses to be paid as care providers.
Unlike a state’s regular Medicaid program, Waiver programs are not entitlements. Waivers have participant enrollment caps; meeting eligibility criteria does not mean one will receive program benefits. Once all the enrollment slots are filled, waiting lists form. The wait for services can be several months to many years.
While the benefits of Waivers are specific to each Waiver, many Medicaid Waivers offer a similar set of long-term care services and supports. Examples include case management, personal care assistance, home health aides, adult day care / adult day health, respite care, home / vehicle modifications, durable medical equipment, skilled nursing care, homemaker / chore services, meal delivery / congregate meals, non-emergency transportation, personal emergency response systems, and transitional services from an institution back into the community.
Many of these benefits are relevant not only to frail, elderly persons and individuals with disabilities, but also to persons with Alzheimer’s disease and other related dementias. In the earlier, and sometimes middle stages of the diseases, persons can continue to live independently with Waiver support.
The settings in which a senior can live and receive support vary based on the Waiver. However, this may include one’s home, the home of a loved one, an adult foster care home / adult family care home, an assisted living residence, and even a memory care unit (also called an Alzheimer’s unit). Medicaid Waivers will not cover the cost of room and board in a community setting, but may cover the cost of long-term care to support independent living.
Watch our animation on all the ways Medicaid programs can help seniors remain living in their homes.Applicants must be a resident in the state in which they are applying for a Medicaid Waiver. While applicants must also demonstrate a financial and functional need, the exact criteria is state-specific. The following information is a general rule of thumb and is relevant for 2023.
Financial Criteria
The income limit is 300% of the Federal Benefit Rate (FBR). This means an applicant can have monthly income up to $2,829. The income of a non-applicant spouse is disregarded and has no impact on the applicant spouse’s income eligibility. Once approved for Waiver benefits, an applicant may not be able to keep monthly income up to the specified limit. Based on the setting in which one resides, the applicant may be limited to a monthly Personal Needs Allowance. If married, their income may also go towards a Monthly Maintenance Needs Allowance, up to $3,853.50 / month, for a non-applicant spouse to prevent spousal impoverishment. More on how Medicaid counts income.
The applicant asset limit is $2,000. If the applicant is married, all assets of the couple, regardless of in whose name an asset is in, are considered jointly owned. However, the non-applicant spouse may be able to keep up to $154,140 of the couple’s assets as a Community Spouse Resource Allowance.
Being over the income and / or asset limit(s) does not mean that one cannot qualify for Medicaid. Implementation of planning techniques can guide the way for eligibility.
See state-specific Medicaid eligibility criteria here. See Medicaid Waivers by state with Waiver-specific criteria here.
Functional Criteria
Most HCBS Waivers require an applicant need a Nursing Facility Level of Care (NFLOC). What this means, exactly, is determined differently by states, but often is determined by a need for assistance with everyday living activities (Activities of Daily Living), such as walking, eating, dressing, and bathing. Basically, without Waiver assistance, one would need to move to a nursing home. Some Waivers, however, only require that an applicant be “at risk” of nursing home placement. All Waivers require a functional assessment of the applicant as part of the application process.
The eligibility criteria for Medicaid nursing home care is often consistent with the requirements for HCBS Medicaid Waivers. Learn more about eligibility for Medicaid-funded nursing home care.
Persons should determine if they are income and asset eligible for the Medicaid Waiver program for which they want to apply prior to filing an application. Being over the income and / or asset limit(s) will result in a denial of benefits. A non-binding Medicaid Eligibility Test is available here.
Applicants need be aware of the 60-month Medicaid Look-Back Period, which immediately precedes one’s date of Medicaid application. During this period, Medicaid checks all asset transfers to ensure none were gifted or sold for less than fair market value. If the Look-Back Rule has been violated, there is an assumption it was done to become asset-eligible and a Penalty Period of Medicaid ineligibility will be established. California is an exception to the 60-month Look-Back Period and is in the process of eliminating their 30-month “look back”. New York is also an exception in that there is no Look-Back Period for Community Medicaid through which long-term home and community based services are available. However, the state plans to implement a 30-month “look back” sometime in 2025.
The application process, which is complicated, is state specific. Supporting documentation is required and may include statements from checking and savings accounts, proof of health insurance (if applicable), and verification of income. Persons who have questions, are married, or have income and / or assets over the limit(s), are highly encouraged to seek the counsel of a professional Medicaid Planner. Find one here. More information about the Medicaid application process can be found here.
Unfortunately, elderly persons cannot generally apply in advance of the need of long-term care and be put on a waiting list for home and community based services. This is because if they do not meet the functional need, they are not program-eligible. California’s Assisted Living Waiver is an exception. CA seniors who are eligible for Aged, Blind and Disabled Medicaid (Medi-Cal) can apply for the Waiver and have their names added to the waiting list even if they do not currently meet the functional need for care.
Another exception exists, as not all states screen for Waiver eligibility prior to putting an applicant on an existing waiting list. For example, New Mexico, Oregon, and Texas are three such states.
To apply for a Medicaid Waiver, persons must contact the Medicaid agency in their state.
Find Medicaid Waiver programs in your state here. Alternatively, a state-by-state list of Medicaid Waivers (and other Medicaid programs) that provide home and community based services can be found here.
Waiver names coordinate with the section of the Social Security Act that authorizes the Medicaid waiver.
Home and Community Based Services (HCBS) Medicaid Waivers, also called Section 1915(c) Waivers, provide long-term services and supports to assist seniors in living in their homes and community. While benefits are intended to delay and prevent the need for institutionalization (nursing home care), provided benefits are Waiver-specific. Common benefits include personal care assistance, in-home and out-of-home respite care, transportation assistance, delivery of hot meals, home and vehicle safety and accessibility modifications, assisted living (memory care) services, adult foster care services, adult day care, mobility devices (wheelchairs and walkers), assistance with laundry, light housecleaning, personal emergency response systems, and preparation of meals.
Many states offer multiple HCBS Medicaid Waivers, but not all states have a HCBS Waiver for the aging population. Since participant enrollment is capped, meeting the eligibility requirements does not ensure one will immediately receive benefits. Waiting lists have been known to extend for months or even years.
Many 1915(c) Waivers allow for consumer-direction. This means that care recipients are able to hire, train, manage, and even fire, the caregiver from who they would like to receive assistance. Commonly, friends and relatives, including adult children, are hired. Furthermore, more and more states are allowing a spouse to be hired.
Home and Community Based Services via Medicaid State Plans – Some states offer HCBS through their regular Medicaid program. Through the 1915(i) state plan option, states can elect for program participants with a lesser functional need (under Nursing Facility Level of Care) to receive select HCBS, such as adult day care or personal care assistance. Through the 1915(k) Community First Choice (CFC) state plan option, states can offer a variety of long-term care services for persons who meet a Nursing Facility Level of Care. Since both of these options are state plan options, they are an entitlement. This means that anyone who meets the eligibility criteria is able to receive services; there is never a waiting list.
Section 1915(b) Medicaid Waivers are also called Freedom of Choice Waivers or Managed Care Waivers. These Waivers allow states to utilize a managed care system, offer varying benefits, as well as require Medicaid beneficiaries to receive benefits and supports via a managed care network. This type of delivery system limits from whom program participants are able to receive services. They cannot simply choose any Medicaid-approved provider. Instead, the provider must be a part of the managed care plan in which the program participant is enrolled.
While 1915(b) Waivers do not authorize home and community based services, these Waivers can be administered in combination with 1915(c) HCBS Medicaid Waivers. This is called a Combination Waiver. This allows long-term care services via 1915(c) Waivers to be provided via managed care networks. Some Combination Waivers include all services provided by Medicaid, not just long-term services and supports. Home and community based services via a Combination Waiver is not an entitlement. Rather, states limit program participation, and there may be a waiting list for long-term care services. For state plan benefits, such as doctor’s appointments, hospitalization, and laboratory work, no waiting list would exist. Learn more about long-term care via Medicaid managed care here.
1115 Demonstration Waivers are also called Research and Demonstration Waivers. These Waivers offer a considerable amount of flexibility on how states run their Medicaid programs. Nearly any requirement under a state’s Medicaid plan can be waived with the objective of testing new approaches that improve a state’s Medicaid program. States use 1115 Demonstration Waivers to expand Medicaid coverage, such as increasing availability of home and community based services, administer benefits not otherwise provided by a state’s Medicaid program, and implement a change in the delivery system of benefits, such as applying a managed care system for long-term care benefits. A somewhat controversial change some states have made through this type of Waiver is to limit or do away with Retroactive Medicaid. Retroactive Medicaid may allow Medicaid-covered expenses to be paid up to 3 months prior to Medicaid application for eligible applicants.
In addition to long-term home and community based services, 1115 Demonstration Waivers can cover nursing home care, behavioral health services, primary care, and emergency care. In other words, these Waivers can cover a state’s entire Medicaid program. Some services, such as personal care assistance, may be consumer directed. Waiting lists for long-term care services may exist.
States have to apply for state specific Medicaid waivers. This is done via the Centers for Medicare and Medicaid Services (CMS), a federal agency that is part of the Department of Health and Human Services (HHS).
While public input is encouraged for both 1915(b) and 1915(c) Waivers, it is required for 1115 Demonstration Waivers. The approval process is limited to 90-days for 1915(b) and 1915(c) Waivers, while there is no time limit for approval of 1115 Waivers. 1915(b) Waivers are initially approved for 2 years, but can be approved for 5 years if the Waiver is extended to persons who are dual eligible (enrolled in both Medicare and Medicaid). 1915(c) Waivers are initially approved for 3 years, but can be approved for up to 5 years if Medicaid-Medicare enrollees are eligible for the Waiver. 1115 Demonstration Waivers are initially approved for 5 years. States must reapply for renewal of Waivers. Even after approval of a Waiver, a state is not required to implement it.
Individuals interested in applying for a Medicaid Waiver should first review the Waivers available in their state.