On December 22, 2008, the Centers for Medicare and Medicaid Services approved Massachusetts' request to renew the MassHealth Section 1115 Research and Demonstration Waiver (Waiver) for an additional three years, through the end of state fiscal year 2011. The Waiver, which has been in place since 1997, authorizes critical federal funding for several health coverage programs for low-income individuals and for the Commonwealth's safety net health system for uninsured residents. It is the programmatic and financial underpinning of the state's health care reform law. Through the Waiver, over 1 million low-income children, families and individuals receive coverage through MassHealth and Commonwealth Care, the subsidized premium assistance program for low-income adults created by Chapter 58. This report explains how the state's Waiver works.