CMS Withdraws Healthy Adult Opportunity Waiver Authority for Capped Funding and Closed Formularies

CMS formally rescinded 2020 guidance that allowed states to cap federal Medicaid funding in exchange for greater flexibility, including closed drug formularies, arguing these Healthy Adult Opportunity waivers conflict with Medicaid's statutory objectives. Tennessee was the only state to implement such a waiver under TennCare III before voluntarily withdrawing the capped financing and closed formulary provisions following legal pressure. While the rescission strengthens legal arguments against similar waivers, it does not prevent the incoming Trump administration from reintroducing the policy, setting up potential renewed interest from states and legal challenges.

Managed Care · Pharmacy · Finance

This is outside commentary from Manatt Health, not part of Medicaid Monitor's independently scored news coverage.

More from Manatt Health