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Vermont’s Global Commitment Waiver: Implications for the Medicaid Program

This issue brief provides some general background on Vermont's Medicaid program and the Global Commitment waiver; answers a series of key questions about how it is designed to work; and discusses the potential implications for the state of Vermont, beneficiaries, and the Medicaid program.

In the fall of 2005, Vermont secured approval for a Section 1115 Medicaid waiver known as the “Global Commitment waiver” that allows the state to fundamentally restructure its Medicaid program. The waiver imposes a cap on the amount of federal Medicaid funding available to Vermont to provide acute care services to its Medicaid population. In combination with a second, long-term care waiver, the Global Commitment waiver makes Vermont the only state in the nation facing a fixed-dollar limit on the amount of federal funding available for its Medicaid program. In exchange for taking on the risk of operating under a capped funding arrangement, the waiver allows Vermont to use federal Medicaid funds to refinance a broad array of its own non-Medicaid health programs, creating a fiscal windfall for the state. It also gives Vermont new flexibility to reduce benefits, increase cost sharing and cap enrollment for many Medicaid beneficiaries.

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Filling the need for trusted information on national health issues, the Kaiser Family Foundation is a nonprofit organization based in Menlo Park, California.