What does HCBS waiver mean?

HCBS stands for home and community-based services. An HCBS waiver is a Medicaid program, usually under section 1915(c) of the Social Security Act, that lets a state waive certain Medicaid rules to pay for services at home and in the community for people who would otherwise need care in a hospital, nursing facility or ICF/IID.

Who qualifies for an HCBS waiver?

Participants must need an institutional level of care, meaning they would otherwise qualify for a hospital, nursing facility or ICF/IID, and must fit the waiver's target group, such as people with I/DD. They must meet the state's Medicaid eligibility rules and can't live in an institution while receiving waiver services (42 CFR 441.301(b)).

Why are there waiting lists for HCBS waivers?

States can cap the number of people each waiver serves, unlike entitlement benefits. In KFF's 2025 survey, 41 states reported waiting lists totaling more than 600,000 people, about 74% of them people with I/DD, with an average wait of 32 months. KFF notes states measure lists differently, so totals aren't directly comparable.

How long does a 1915(c) waiver last?

CMS approves a new 1915(c) waiver for an initial period of three years. After that, states can renew it for periods of five years at a time (42 CFR 441.304). States can also amend a waiver between renewals, for example to add services or change rates.

What is an HCBS waiver? Medicaid 1915(c) explained

HCBS waivers, mostly under section 1915(c), let states fund home and community care instead of institutions; about 257 were active as of Sept. 2026.

An HCBS waiver is a Medicaid program that lets a state pay for home and community-based services for people who would otherwise need care in a hospital, nursing facility or ICF/IID. Most HCBS waivers are authorized under section 1915(c) of the Social Security Act and approved by CMS under federal rules at 42 CFR Part 441, Subpart G. As of September 2026, Medicaid.gov says about 257 of these 1915(c) programs are active nationwide.

The federal rule states the purpose plainly: a 1915(c) waiver lets a state offer the home and community-based services a person needs to avoid institutionalization (42 CFR 441.300).

Why it's called a waiver

Medicaid normally requires a state to offer the same benefits statewide and on equal terms to everyone who qualifies. A 1915(c) waiver lets CMS set aside, or "waive," some of those rules. According to Medicaid.gov, a state can waive:

Statewideness, so it can offer services only in certain areas.
Comparability, so it can offer services only to certain groups, such as people with intellectual and developmental disabilities.
Community income and resource rules, meaning the income and resource rules that apply to people living in the community (section 1902(a)(10)(C)(i)(III) of the Act).

States also set a maximum number of participants for each waiver. When those waiver slots are full, eligible people go on a waiting list.

Who qualifies

Waiver participants must need an institutional level of care. That means they would otherwise qualify for care in a hospital, nursing facility or ICF/IID. For how those facilities differ from HCBS, see HCBS vs. ICF/IID. They also can't be living in one of those institutions while they receive waiver services (42 CFR 441.301(b)). States design each waiver for one or more target groups, such as older adults, people with physical disabilities, or people with I/DD.

KFF reports that 48 states offer waiver programs for people with I/DD as of 2025. The 2025 federal budget reconciliation law also created a new kind of 1915(c) waiver for people who do not need an institutional level of care, KFF reports.

What services a waiver can cover

Federal rules list the services a 1915(c) waiver may include (42 CFR 440.180(b)):

Case management, often through a supports coordinator
Homemaker, home health aide and personal care services
Adult day health
Habilitation, including day habilitation and residential habilitation
Respite care
Day treatment and psychosocial rehabilitation for people with chronic mental illness
Other services CMS approves as cost-effective and needed to avoid institutionalization

States can also add "expanded habilitation," which covers prevocational, educational and supported employment services (42 CFR 440.180(c)). In I/DD waivers, many of these services are delivered by direct support professionals employed by provider agencies or hired through self-direction.

The rules every waiver must follow

To get and keep CMS approval, a state must show that its waiver:

Costs no more than institutional care for the same group (the cost-neutrality test described on Medicaid.gov).
Protects health and welfare, including adequate standards for every type of provider (42 CFR 441.302(a)).
Uses a written person-centered service plan for each participant, built through person-centered planning (42 CFR 441.301(b) and (c)). Each person must be reassessed and have the plan reviewed at least every 12 months.
Delivers services in settings that meet the HCBS settings rule (42 CFR 441.301(c)(4)). Settings must be integrated in the community, support full community access, offer choice, protect privacy and dignity, and support independence.

New waivers are approved for three years. Renewals run for five years at a time (42 CFR 441.304).

How big HCBS waivers are

HCBS now reaches far more people than institutional care. KFF reports that 5.1 million people used Medicaid home care in 2023, compared with 1.4 million in institutional long-term care. About half of home care users get services through waivers. KFF counts 259 programs run under 1915(c) and 15 under section 1115 demonstrations, with 1915(c) waivers in use in 47 states.

Waiting lists are the other side of that growth. In KFF's 2025 survey, 41 states reported waiting lists, and more than 600,000 people were waiting for waiver services. About 74% of them were people with I/DD. The average wait was 32 months, and 37 months for people with I/DD. KFF notes that more than 80% of people on waiting lists are eligible for some Medicaid state plan services while they wait. It also notes that states measure their lists differently: six states that don't screen people for eligibility account for about 325,000 of those waiting. All figures are as of 2025.

How it varies by state

Each state writes its own waivers, so eligibility groups, service menus, rates, provider rules and caps all differ. A few states (Arizona, New Jersey, Rhode Island and Vermont) run their HCBS entirely through section 1115 demonstrations instead of 1915(c) waivers, according to KFF. Most states pay for I/DD waiver services on a fee-for-service basis. KFF found that only 8 of the 47 responding states with I/DD waivers use managed care for them. For your state's rules, look for its waiver application or the waiver pages of its developmental disabilities agency.

Why it matters for providers and DSPs

Rates and wages: Waiver rates, set through each state's rate study and fee schedule, largely determine what agencies can pay DSPs. Several states now attach wage pass-through conditions to waiver rate increases.
Compliance: Documentation, the person-centered plan, incident management and the settings rule all come from waiver requirements. Surveys and audits check against them.
Capacity: A new waiver slot only helps if an agency has staff to deliver the service. Waiting lists and workforce shortages feed each other.
Policy change: Rules from the 2024 federal access rule, including new reporting on waiting lists and payment rates, take effect in stages between 2026 and 2030. As of September 2026, CMS has a proposed rule under White House review that could change parts of that rule.