Trump administration tightens oversight of state Medicaid waivers
8 reported
The Trump administration has informed states that it will impose stricter financial oversight on Section 1115 demonstration waivers, which states use to pilot innovative Medicaid programs. In letters to state Medicaid directors, the administration announced changes requiring that waivers be certified by the Centers for Medicare and Medicaid Services chief actuary to ensure they do not increase federal spending compared to baseline projections. While budget neutrality was already required, the new guidance mandates actuary approval in addition to the existing discretion of the Department of Health and Human Services secretary. Starting January 1, 2027, applications will not be approved without this certification. CMS will also require more spending analyses, documentation, monitoring, and evaluation from states. The guidance further states that waivers must align with "promoting the objectives of the Medicaid statute." CMS did not respond to questions from Stateline before publication. This is the latest in a series of administration actions tightening Medicaid spending, following last year's decision to stop approving new waivers with workforce initiatives and the rescinding of a Biden-era framework for addressing health-related social needs.
What’s reported
The administration sent letters to state Medicaid directors announcing changes to Section 1115 demonstration waivers.
Starting Jan. 1, 2027, waiver applications will not be approved unless the CMS chief actuary certifies they will not increase federal spending compared to without the demonstration.
Budget neutrality was already required, but now actuary approval is needed in addition to HHS secretary discretion.
CMS will require more spending analyses, documentation, monitoring, and evaluation from states.
The guidance says waivers must be in line with "promoting the objectives of the Medicaid statute."
CMS did not respond to questions from Stateline before publication.
Last year, the administration stopped approving new Section 1115 waivers with workforce initiatives and rescinded aspects of a Biden-era expanded framework for health-related social needs.
The One Big Beautiful Bill Act, enacted last summer, will cut over $900 billion from Medicaid and require work requirements for "able-bodied" enrollees.
Key figures
Trump administration (referenced as the administration)
Centers for Medicare and Medicaid Services (CMS)
CMS chief actuary (not named)
Department of Health and Human Services secretary (not named)
Nada Hassanein, Stateline reporter
Sources: stateline.org
