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Spending on Medicaid State Directed Payments Before New Limits Take Effect

Forty states and DC currently receive $93 billion in annual federal Medicaid spending through state directed payments (SDPs) and may be at risk due to forthcoming limits on these payments, according to new KFF estimates. Annual federal spending on SDPs is highest in California (an estimated $10.6 billion)—followed by Texas ($6.3 billion), North Carolina ($5.2 billion), and Illinois ($5.1 billion).

Forthcoming Policy Changes to Medicaid State Directed Payments

Changes to Medicaid State Directed Payments

The 2025 reconciliation law cut federal Medicaid spending by an estimated $911 billion from 2025 through 2034, some of which stems from new restrictions on Medicaid state directed payments (SDPs) for hospital and other health care services. This issue brief describes SDPs and forthcoming policy changes stemming from the 2025 law and the proposed regulation to implement those requirements and make other changes.

Medicaid Work RequiremEnts

Tracking the 2025 Reconciliation Law’s Medicaid Work Requirements: Data and Policies

To implement Medicaid work requirements, states will need to make important policy and operational decisions, implement needed system upgrades or changes, develop new outreach and education strategies, and hire and train staff, all within a relatively short timeframe. The information tracked here can serve as a resource to understand Medicaid work requirements and state options, gauge readiness, and track implementation of the requirements.

understanding medicaid

Medicaid Financing

Medicaid represents $1 out of every $5 spent on health care in the U.S. and is the major source of financing for states to provide health coverage and long-term care. This brief examines key questions about Medicaid financing and how it works.

Medicaid Program Integrity

This brief explains what is known about improper payments and fraud and abuse in Medicaid and describes ongoing state and federal actions to address program integrity.

Medicaid and Provider Taxes

All states except Alaska cover some state Medicaid costs with taxes on health care providers. This brief uses data from KFF’s 2024-2025 survey of Medicaid directors to describe current practices and the federal rules governing them.

Medicaid and Hospitals

Absorbing reductions in Medicaid spending could be challenging for hospitals, particularly for those that are financially vulnerable. This brief provides data on the reach of Medicaid across hospitals, patients, and charity care.

Medicaid Home Care

This issue brief provides an overview of what Medicaid home care (also known as “home- and community-based services”) is, who is covered, and what services were available in 2025.

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  • Data Analytics in Medicaid: Spotlight on Colorado’s Accountable Care Collaborative

    Issue Brief

    An integral component of Colorado Medicaid’s coordinated care initiative, the Accountable Care Collaborative, is the Statewide Data Analytics Contractor (SDAC), which is responsible for providing actionable data through a web portal to primary care providers and regional care collaborative organizations. The metrics and tools the SDAC provides undergird the effort to drive improvement in care management and individual and community health, and support the accountable care model.

  • The Cost of Not Expanding Medicaid

    Report

    As states wrap up legislative sessions and make decisions about whether to implement the Medicaid expansion included in the Affordable Care Act (ACA), this new analysis highlights the implications of these decisions for coverage, state budgets and providers. The decisions by as many as 27 states not to adopt the Medicaid expansion will leave a many more uninsured; these states would also forgo billions in federal funds.

  • Faces of Dually Eligible Beneficiaries: Profiles of People with Medicare and Medicaid Coverage

    Issue Brief

    This brief examines the role of Medicare and Medicaid in the lives of dually eligible beneficiaries – low-income seniors and younger adults with disabilities who are eligible for both programs – through personal profiles. It includes a glossary of eligibility and service delivery system terms and state-level enrollment and expenditure data for dual eligibles.

  • Medicaid Enrollment: June 2011 Data Snapshot

    Issue Brief

    This snapshot finds that between June 2010 and June 2011, while enrollment continued to grow as an additional 2.2 million people enrolled in Medicaid programs nationally, enrollment growth in the program slowed as the economy started to improve. Enrollment growth over this period was 4.4 percent, down significantly each of the two prior annual periods. Since June 2007, just before the start of the recession, Medicaid enrollment has grown by over 10 million people, over…

  • Medicaid Eligibility and Enrollment Policies for Seniors and People with Disabilities (Non-MAGI) During the Unwinding

    Issue Brief

    Eligibility policies for seniors and people with disabilities vary across states, but states made similarly wide-ranging changes to streamline renewal processes for these enrollees. KFF’s Survey of Medicaid Financial Eligibility & Enrollment Policies for Seniors & People with Disabilities was conducted in March 2024 by KFF and Watts Health Policy Consulting.

  • Medicaid Efforts to Address Racial Health Disparities

    Issue Brief

    Medicaid programs are a major source of coverage for people of color and a potential mechanism to address racial health disparities. This issue brief provides insight into ways Medicaid can mitigate racial health disparities, how coverage may vary by race and ethnicity, and other Medicaid initiatives states pursuing to address racial disparities in health and health care.