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Highlights

States provide health care coverage to about 60 million low-income individuals through Medicaid, a joint federal and state program established under title XIX of the Social Security Act (the Act). Title XIX of the Act established parameters under which states operate their Medicaid programs, such as requiring states to cover certain services for certain mandatory groups of individuals such as low-income children; pregnant women; and aged, blind, or disabled adults. The Secretary of Health and Human Services (HHS), however, possesses authority to allow states to depart from these requirements under certain conditions. Under section 1115 of the Act, the Secretary may waive certain Medicaid requirements and authorize Medicaid expenditures for experimental, pilot, or demonstration projects that are likely to assist in promoting Medicaid objectives. Medicaid section 1115 demonstration projects vary in scope, from targeted demonstrations, which are limited to specific services and populations, to comprehensive demonstrations, which affect Medicaid populations statewide, cover a broad range of services, and account for the majority of a state's Medicaid expenditures. Since 1982, the Secretary has approved comprehensive demonstration projects in a number of states, including Arizona, Florida, Hawaii, Oregon, Tennessee, and Vermont. Since our 2002 report, and our subsequent 2004 report on 1115 demonstration approvals, HHS has continued to review and approve waivers of federal requirements for new comprehensive demonstration proposals. At Congress's request, we reviewed recently approved comprehensive demonstrations, including the process HHS used to obtain public input on these proposals. This correspondence addresses (1) implications for beneficiaries of recently approved comprehensive Medicaid demonstrations and (2) the extent to which the Secretary ensured opportunities for public input during the approval process. Our review encompassed recently approved comprehensive demonstration programs in two states, Florida and Vermont. These were the two demonstration programs meeting our criteria of (1) being approved by HHS from July 2004 (when we last reviewed HHS-approved section 1115 demonstrations) through December 2006 and (2) being comprehensive, including accounting for greater than 50 percent of the state's Medicaid expenditures.

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