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Recent Updates to Section 1115 Waiver Budget Neutrality Policy: Overview and Implications for States

Federal policy requires that Section 1115 Medicaid waivers be “budget neutral” for the federal government—in other words, demonstrations must not increase federal spending relative to a state not pursuing an 1115 demonstration. This issue brief summarizes the key policy changes established through the Oregon and Massachusetts waiver renewals (and reinforced through the Arizona and Arkansas approvals) and discusses key implications for states.