Waivers Are Subject to the Discretion of Federal Bureaucrats

The secretary of HHS has fairly broad discretion in granting waivers. Section 1115 authorizes the secretary to approve exemptions for “any experimental, pilot, or demonstration project which, in the judgment of the Secretary, is likely to assist in promoting the objectives” of the Social Security Act.[32] Such broad discretion only adds to the uncertainty as states consider whether and how to execute Medicaid expansion.

The secretary’s discretion, though broad, is not unlimited. By the very terms of the statute, the secretary may not approve Section 1115 waivers that are inconsistent with the goals and objectives of the Social Security Act, which includes the modifications to this act made by the ACA.[33] It is difficult to imagine, therefore, that the secretary will approve waivers for any pilot or demonstration programs that effectively limits or affects mandatory Medicaid populations — which would include the population targeted by expansion — insofar as such restrictions would not promote the law’s objectives. In other words, such programs may simply be beyond the secretary’s statutory authority to approve.

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Finally, the secretary’s Section 1115 Medicaid waiver authority only applies to the requirements of Section 1902 of the Social Security Act. The secretary has no authority, for example, to approve waivers for pilot programs modifying the federal match rates.