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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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  • More Than Meets the Eye: Long-Term Care Provisions in the New Reform Law

    Event Date:
    Event

    In the debates around the health reform law and its implementation, little attention has been given to the law's provisions supporting long-term care. This briefing offered an overview of these provisions, such as the CLASS Act, a new national, voluntary insurance program to help working adults finance services and supports that they may need in the future, and the Community First Choice Option, which helps Medicaid recipients get attendant care at home. This October 1…

  • Medicaid and HIV: A National Analysis

    Report

    This report considers Medicaid’s current role in providing health coverage for people with HIV. It analyzes national enrollment and spending patterns for Medicaid enrollees with HIV, looking at key demographics, Medicaid eligibility pathways, services and geographic distribution. It also compares Medicaid enrollees with HIV to their counterparts without the disease, as well as to the population of people living with HIV in the U.S. The report finds that while Medicaid enrollees with HIV represent less…

  • The Medicaid Medically Needy Program: Spending and Enrollment Update

    Issue Brief

    This brief examines Medicaid's medically needy program, which gives states the option to extend Medicaid eligibility to those with high medical expenses whose income exceeds the maximum threshold, but who would otherwise qualify. It provides updated enrollment and spending figures on the medically needy using data through federal fiscal year 2009, and explains how individuals become eligible for the program and key considerations for policy discussions. Brief (.pdf)

  • Analyses of Kaiser Permanente Services for Insured Children

    Report

    Analyses of the Child Health Plan and Other Kaiser Permanente Services for Publicly and Privately Insured Children, a new policy brief prepared for the Kaiser Family Foundation and the California HealthCare Foundation by the Institute for Health Policy Studies at U.C. San Francisco, summarizes the results and policy implications of four different analyses comparing the experiences of children enrolled through Kaiser Permanente in the Child Health Plan, Medi-Cal, Healthy Families, and commercial programs. The aggregate…

  • Disability, Health Coverage, and Welfare Reform

    Report

    This report analyzes data from a survey of 42 low-income families with children with moderate or severe disabilities to better understand the impact of welfare reform on health coverage for these families. Report

  • Is Medicaid Too Big to… Block Grant?

    From Drew Altman

    In his latest column, KFF President and CEO Drew Altman examines how the politics around the Medicaid program have changed as it has grown much larger and more popular, making it even tougher to block grant the program to cut federal Medicaid spending and hand it off to the states.

  • Nearly a Quarter of People Who Say They Were Disenrolled from Medicaid During the Unwinding Are Now Uninsured   

    News Release

    Nearly a quarter (23%) of adults who say they were disenrolled from Medicaid since early 2023 report being uninsured now, finds a new KFF national survey examining how the unwinding affected enrollees.  Overall, 19% of adults who had Medicaid prior to the start of unwinding say they were disenrolled at some point in the past year. Of this group, a large majority (70%) were left at least temporarily uninsured, while 30% already had another form…

  • Examining New Medicaid Resources to Expand School-Based Behavioral Health Services

    Issue Brief

    In light of worsening mental health among youth, strategies have been implemented to improve access to behavioral health services in recent years, including expanding school-based care for students. Leveraging Medicaid to improve and address gaps in school-based behavioral health services has been a key strategy in recent years as youth mental health concerns have grown. Provisions from the Safer Communities Act of 2022 utilize Medicaid to expand both school-based health care and other mechanisms of…

  • The Vast Majority of Nursing Facilities Will Need to Hire More Staff to Comply with the Final Federal Rule When Fully Implemented, Unless They Qualify for an Exemption

    News Release

    Based on a new KFF analysis, fewer than 1 in 5 (19%) nursing facilities currently meet the minimum staffing standards set out in the final requirements of the federal rule released today by the Centers for Medicare and Medicaid Services (CMS). CMS adopted staffing standards that are similar to the staffing requirements in the rule proposed last year, which included minimum staff levels of 0.55 registered nurses and 2.45 nurse aide hours per resident day.…