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Medicaid beneficiaries. Section 1915(c) waivers let states develop innovative alternatives toinstitutionalization, and are approved initially for three years, with five-year renewal periods.The waivers allow states to provide home- and community-based services that help keepMedicaid beneficiaries out of nursing homes, hospitals, and other institutions in order tomaintain their independence and family ties as well as save money. The waivers cover elderlypeople or people with physical or mental problems who would qualify for Medicaid if they wereinstitutionalized, and the programs must be budget-neutral. 66Table 1. Main Types of WaiversType of Waiver Purpose Requirements1115 — Research andDemonstration(Medicaid and SCHIP)1915(b) — Freedom ofChoice (Medicaid only)1915(c) — Home andCommunity-Based Services(Medicaid only)Waives a variety of requirements to let stateshave flexibility to test new ideas for operatingtheir programs. Can implement new servicesor delivery methods, maximize coverage forpeople below 200% FPL (HIFA waiver), orextend drug coverage to certain people(Pharmacy Plus waiver).Waives statewideness, comparability andfreedom of choice. States can requireenrollment into managed care, limit thenumber of providers and provide additionalservices for some people.Waives statewideness, comparability, andresource and income rules. Allowscommunity-based services to be provided topeople who are eligible for care in a nursinghome, intermediate care facility for personswith mental retardation (ICF/MR), or hospital.Can serve elderly or disabled in general, orcan target specific chronic conditions anddiseases. Can offer extra services such as casemanagement, home health aide services, andrespite care.Must be budget neutral.Five-year timeframe, subjectto renewals. CMS evaluatesfor impact on utilization,coverage, spending, quality,access, and satisfaction.Must be cost effective. Twoyeartimeframe, subject torenewal. Independentevaluation required to showthat cost, quality,and accesshave not been harmed.Must be budget neutral.Must have safeguards inplace to protect enrollees.Three-year timeframe,subject to five-year renewals.Sources: Texas Health and Human Services Commission, Texas Medicaid in Perspective, 5th ed., 2004, pp. 3-12, 3-13, available at http://www.hhsc.state.tx.us/medicaid/reports/PB5/PinkBookTOC.html, accessed January 6,2005; and Social Security Act, Title XIX, Sec. 1915, available at http://www.ssa.gov/OP_Home/ssact/title19/1915.htm, accessed January 5, 2005.Section 1931The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA)added Section 1931 to the Social Security Act, which lets states extend Medicaid eligibility tolow-income parents who are not receiving cash assistance. States must cover at a minimumthose parents with incomes below those required in 1996 for welfare, whether or not theyreceive welfare now, ensuring that those eligible before PRWORA was passed remain eligible.States may also cover those with higher incomes, which a majority of states do. Section 1931gives states more flexibility to cover low-income people by increasing income and assetsdisregards and limits, which is made easier because it can be done through amending thestate’s Medicaid State Plan instead of applying for a federal waiver. Enrollments can be cappedB-14