Section 1115 Substance Use Disorder Waivers: Opportunities and Limitations

In 2022, 48.7 million people in the United States (17.3% of the population aged 12 or older) met the criteria for substance use disorder (SUD). Nearly 40% of people with opioid use disorder (OUD) are Medicaid recipients, making Medicaid the largest single source of OUD treatment insurance coverage. Despite this crucial importance, two major barriers to expanding access to treatment for persons with SUD are baked into the program: the institutions for mental diseases (IMD) exclusion and the Medicaid inmate exclusion. This article first provides a timeline of these two waiver reforms to illustrate the variation in waivers over time and across states. Then it assesses the evidence to date on how well the SUD waivers are working to accomplish these goals in states that have adopted them. This review will focus on the SUD waivers that address the IMD exclusion, because the Medicaid inmate exclusion waivers are too new for any systematic evidence. It will then consider outstanding implementation challenges and policy risks associated with the IMD and Medicaid inmate exclusion waivers, and it will conclude by considering challenges that these waivers do not address and that therefore demand particular attention to properly serve persons living with SUD.