The "COVER Now Act" proposes a new Medicaid demonstration project, enabling political subdivisions within states that have not expanded Medicaid to offer medical assistance to their Medicaid expansion population . This initiative aims to extend healthcare coverage to vulnerable residents who would otherwise lack access due to their state's non-participation in the Affordable Care Act's Medicaid expansion. The Secretary of Health and Human Services is authorized to select qualifying subdivisions, which can be individual entities or partnerships, to participate in these projects. Participating political subdivisions will receive enhanced federal matching percentages for their expenditures, beginning with 100% for the first three years of the project. This federal share gradually decreases in subsequent years, with rural subdivisions potentially receiving higher rates. The demonstration projects are designed to last for seven years, with a possible five-year extension, or until the state itself expands Medicaid, at which point beneficiaries would be automatically enrolled into the state plan. To facilitate these projects, the Secretary may waive certain Medicaid requirements , such as statewideness and the single state agency rule. The bill also includes provisions to deter states from undermining these local efforts; states that engage in "prohibited items," such as shifting costs, withholding funding, or obstructing a subdivision's participation, will face a 25% reduction in their federal administrative cost matching. The Secretary is limited to approving no more than 100 such demonstration projects and is not permitted to require budget neutrality as a condition for approval.