States generally need a federal waiver to cover home and community services on a large scale.

And they agreed on how to create a commission to work on closing hospitals, something the governor wanted to ensure a $1.5 billion federal waiver.

The state could have embarked on pieces of the plan without the federal waiver, like covering adults with children.

Deep reforms of publicly funded health care programs require federal waivers of current rules.

No one has lost food stamps as a result of our decision not to accept the federal waiver.

They would like to be able to make these changes without applying for federal waivers, which often take months or years to get approved.

Mr. Pataki said it appeared the plan would cut too little to allow the state to capture a federal waiver worth about $1.5 billion.

Under a federal waiver granted in 1993, Tennessee covered many people who would not otherwise have been eligible for Medicaid.

Under one proposal, states would be allowed to make many changes like increasing co-payments and limiting eligibility without having to get federal waivers.

Since 1992, the number of Medicaid beneficiaries receiving such care under federal waivers has tripled, to 800,000, and it is expected to continue growing.