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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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  • New Kaiser 50-State Survey Provides Data on States’ Medicaid and Children’s Health Insurance Program Eligibility Levels and Enrollment, Renewal and Cost-Sharing Policies as of January 2015

    News Release

    A new survey from the Kaiser Family Foundation provides a comprehensive look at where states stand with their Medicaid and Children’s Health Insurance Program (CHIP) eligibility levels and enrollment, renewal and cost-sharing policies as of January 2015, one year into implementation of the Affordable Care Act’s major coverage provisions. The 13th annual survey, conducted by the Foundation’s Kaiser Commission on Medicaid and the Uninsured and Georgetown University’s Center for Children and Families, finds that states…

  • Web Briefing: Modern Era Medicaid and CHIP – Findings from a 50-State Survey of Eligibility, Enrollment, Renewal, and Cost-Sharing Policies

    Event Date:
    Event

    The Kaiser Commission on Medicaid and the Uninsured (KCMU) hosts a web briefing to present findings from our 13th annual 50-state survey of Medicaid and CHIP eligibility, enrollment, renewal, and cost-sharing policies. The survey provides a profile of where states stand as of January 2015, one year into the implementation of the major Medicaid provisions of the Affordable Care Act (ACA).

  • Explaining Armstrong v. Exceptional Child Center: The Supreme Court Considers Private Enforcement of the Medicaid Act

    Issue Brief

    On January 20, 2015, the United States Supreme Court will hear oral argument in Armstrong v. Exceptional Child Center, a case that raises the issue of whether Medicaid providers can challenge a state law in federal court on the basis that it violates the federal Medicaid Act and therefore is preempted by the Supremacy Clause of the U.S. Constitution. This issue brief examines the major questions raised by the Armstrong case, explains the parties’ legal…

  • Proposed Medicaid Expansion in Utah

    Fact Sheet

    This fact sheet provides a summary of the proposal to expand Medicaid in Utah. This has not been officially submitted to CMS and needs state legislative approval before it could be implemented.

  • Medicaid Expansion in Red States

    From Drew Altman

    In this column for The Wall Street Journal’s Think Tank, Drew Altman explains that Tennessee Gov. Bill Haslam's decision on Medicaid expansion via the Affordable Care Act is the latest sign of pragmatism slowly winning over ideology in red states.

  • Web Briefing: Early Impacts of the Medicaid Expansion for the Homeless Population

    Event Date:
    Event

    The Affordable Care Act’s Medicaid expansion provides a significant opportunity to increase health coverage and improve access to care for individuals experiencing homelessness, who historically have had high uninsured rates and often have multiple, complex physical and mental health needs. On Monday, December 15, 2014, the Kaiser Family Foundation hosted a web briefing to examine the early impacts of the ACA’s Medicaid expansion on the homeless population, as well as opportunities and challenges looking forward.  The…

  • Web Briefing: The Medicaid Managed Care Market Tracker

    Event Date:
    Event

    More than half of the nation’s 67.9 million Medicaid beneficiaries now receive their health care in comprehensive managed care organizations (MCOs) – and the number and share are growing. As states expand their use of Medicaid managed care, the Kaiser Family Foundation has launched a new interactive tool to enhance understanding and analysis of this important sector of the Medicaid program: the Medicaid Managed Care Market Tracker. On Thursday, December 11 at 12:30 p.m. ET,…

  • El seguro de salud, explicado: ¡los YouToons lo tienen cubierto!

    Video

    El seguro de salud, explicado: ¡los YouToons lo tienen cubierto! desglosa conceptos de seguros como primas, deducibles y redes de proveedores.  Explica cómo las personas pagan por su cobertura y cómo obtener cuidado médico y medicamentos recetados con distintos tipos de seguros de salud, incluyendo HMOs y PPOs.

  • What Drives Spending and Utilization on Medicaid Drug Benefits in States?

    Issue Brief

    With the approval of new specialty drugs, such as the Hepatitis C treatments Sovaldi and Harvoni, states are mindful that the cost the Medicaid prescription drug benefit could increase. To achieve savings, and improve management and health outcomes, it is important to understand which drugs are most frequently prescribed and which drive spending. Using state drug utilization data provided through the Medicaid Drug Rebate Program, as well as an industry drug database, this issue brief…