Medicaid Section 1115 Demonstration Waivers: Comparing California, Massachusetts, and New York

Greg Moody, Health Management Associates
Stan Rosenstein, Health Care Consultant


This is archived content; for historical reference only.

California’s Medi-Cal Hospital Uninsured Care 1115 waiver, which took effect on July 1, 2005, and expires on August 31, 2010, has fundamentally altered the way Medi-Cal pays hospitals and has provided $180 million in federal funds for each of three years to provide coverage for low-income uninsured individuals. These changes were made under the authority of Section 1115 of the Social Security Act, which permits the federal government to waive certain Medicaid statutory requirements and allows states to receive federal matching funds for Medicaid services that would otherwise not be eligible for federal funding.

The Medi-Cal Hospital Uninsured Care waiver involves several billion dollars in federal funds and is reshaping health services for low-income Californians, the hospitals that serve them, state and county budgets, and California’s health care economy.

This issue brief compares California’s waiver to the innovative and more comprehensive 1115 waivers of two states: Massachusetts and New York. Massachusetts illustrates how a state has used the 1115 waiver to substantially expand Medicaid coverage to the uninsured and attain nearly universal coverage. New York has also used its waiver to reorient the state’s health care spending away from inpatient facilities toward delivery systems focused on outpatient and primary care.