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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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  • Kaiser–Commonwealth Fund Survey: Most Primary Care Providers Report Seeing More Medicaid or Newly Insured Patients Since January 2014, But Little Change in Ability to Provide Quality Care

    News Release

    As with the Public, Physicians' Views on Affordable Care Act Split Along Party Lines The first in a series of reports on a comprehensive new survey finds most primary care doctors, nurse practitioners, and physician assistants report an increase in Medicaid or newly insured patients since the Affordable Care Act's (ACA) major coverage provisions took effect, yet little change in their ability to provide high-quality care. Overall, 59 percent of physicians and 64 percent of…

  • How Have State Medicaid Expansion Decisions Affected the Experiences of Low-Income Adults? Perspectives from Ohio, Arkansas, and Missouri

    Issue Brief

    This brief examines the experiences of low-income adults in three states that have made varied Medicaid expansion decisions: Ohio, which adopted the ACA Medicaid expansion, Arkansas which implemented the Medicaid expansion through a “Private Option” waiver, and Missouri, which has not adopted the expansion. While Arkansas and Ohio implemented the expansion in different ways, participants in both states described how obtaining coverage improved their ability to access care, contributing to improvements in their ability to…

  • Children’s Coverage: What Matters Most to Parents Results from Focus Groups in 6 Cities

    Issue Brief

    This report is based on based on focus group discussions with parents with moderate incomes enrolled in private coverage (employer sponsored or Marketplace) who had children in public coverage (primarily CHIP) or children with private coverage. This report is based on 14 focus group discussions conducted by the Kaiser Family Foundation and John Snow, Inc. in six cities during February and March 2015. Sites included Birmingham, AL, Chicago, IL, Denver, CO, Philadelphia, PA, and Tampa,…

  • Resources for Medicare & Medicaid’s 50th Anniversary

    News Release

    On July 30, 1965, President Lyndon Johnson signed the law creating the Medicare and Medicaid programs.  As the programs' 50th anniversary nears, the Kaiser Family Foundation offers several resources that look at the programs' past and future, including videos that are available to share at in-person events or with online communities: Six new articles authored by Foundation staff and published in the journal Generations reflecting on Medicare’s history, evolution and future, the Medicare and Medicaid…

  • Medicaid Balancing Incentive Program: A Survey of Participating States

    Report

    The Balancing Incentive Program provides enhanced federal matching funds, allowing states to advance their efforts to rebalance Medicaid long-term services and supports (LTSS) spending and expand access to home and community-based services as an alternative to institutional care. This report highlights participating states' efforts to implement the program's three structural requirements and use the enhanced federal funds in support of other Medicaid LTSS rebalancing efforts.

  • Behavioral Health Parity and Medicaid

    Issue Brief

    This issue brief explains how behavioral health parity applies in the Medicaid program, including the major provisions of the Centers for Medicare and Medicaid Services’ (CMS) April 10, 2015 proposed regulations, and identifies key policy issues at the intersection of behavioral health parity and Medicaid.

  • Newly Insured Californians Report Easier Access to Care Than the Uninsured

    News Release

    Low-income California adults who gained insurance coverage in 2014 had an easier time accessing health care than those who were uninsured and increased financial protection from medical bills, according to a new Kaiser Family Foundation (KFF) report. The report, funded by the Blue Shield of California Foundation and based on findings from the California sample of the 2014 Kaiser Survey of Low-Income Americans and the ACA, finds that newly-insured Californians were more likely to have…