Medicaid in 2006: a trip down the yellow brick road.

This issue brief explores the continuing evolution of the Medicaid program on several fronts. It discusses the benefits and cost-sharing flexibility that is included in the Deficit Reduction Act of 2005 (DRA) and examines the implications of these provisions for states, beneficiaries, and providers. The paper also explores recent trends in section 1115 waiver development and considers the use of waivers as a vehicle for restructuring Medicaid financing systems and for testing completely new approaches to health care delivery. The role of section 1115 waivers in the context of the DRA and as a mechanism for continued state innovation is also discussed.