Medicaid Waivers: California's Use of a Federal Option

Valerie Lewis, M.P.P., M.P.H.

This report outlines the history and purpose of Medicaid waivers, describes California's Medi-Cal waiver programs, outlines the waiver approval processes, and discusses additional waiver opportunities for California.

March 2000

Guidelines for Medi-Cal (California's Medicaid program) are based on laws and regulations created by the federal government. It is no small task for an individual state to modify its Medicaid program.

Specifically, when a state wants to make significant changes to its Medicaid program, it must take one of two steps: either (1) amend its State Medicaid Plan (the contract with the federal government); or (2) receive an exemption or “Medicaid waiver” from portions of Title XIX of the Social Security Act by the U.S. Department of Health and Human services.

Over 40 states, including California, have received waivers to adapt their Medicaid programs in a variety of ways. At the time of this report, California had 29 active Medicaid waivers and more than half of the state’s Medi-Cal recipients received services in a delivery system created under a waiver. Examples of modifications made to the Medi-Cal program that required waivers include: redirecting indigent care funds; expanding Medi-Cal eligibility; restructuring models of care delivery; changing the Medi-Cal benefits package; and simplifying the Medi-Cal program.

This report includes:

  • History of Medicaid waivers;
  • Types of Medicaid waivers;
  • California’s Medicaid waivers;
  • Waiver approval process;
  • Impact of the Balanced Budget Act of 1997;
  • Additional waiver opportunities for California;
  • Key policy and research questions; and
  • Implications for policymakers.
The development of new Medicaid waivers for California raises several policy issues and requires an understanding of the impact -- intended and unintended -- of past waiver programs in California. This document is intended to provide a background on the Medicaid waiver system and describe California's options for using waivers to modify the Medi-Cal program.

The full report can be found under Document Downloads below.