This article focuses on recent developments in state Medicaid programs and the role ojSection 1115 waivers in this process. The evidence presented here demonstrates quite clearly that the states are using Section 1115 waivers to experiment with a broad range of innovative health-care service delivery, reimbursement, and eligibility concepts. This has allowed the states to reconfigure their Medicaid systems. More important, perhaps, the use of Section 1115 waivers has also increased the role ofof the states in the American health-care policy process.