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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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  • Medicaid and the Elderly – Policy Brief

    Issue Brief

    Medicaid and the Elderly September 1995 Medicaid is a crucial health financing program for the elderly population, providing assistance to over 1 in 10 Americans age 65 or older. Nearly four million elderly people receive Medicaid assistance with medical and long-term care expenses. Medicaid's coverage helps low-income elderly people gain access to health care services, eases financial burdens for medical expenses, and provides a safety net for long-term care coverage. Medicaid plays three essential roles…

  • Medicaid and Managed Care

    Fact Sheet

    This fact sheet provides an overview of the Medicaid program's increasing reliance on managed care to deliver services. Fact Sheet

  • Women and Medicare:  Making the Connection

    Other Post

    Women and Medicare: Making the Connection This briefing examines Medicare s role in meeting older women's health needs, the gaps in Medicare's benefits package for women, and the emerging debate over prescription drug coverage and Medicare reform.

  • Medicaid and Children’s Health Insurance Program Provisions in the New Health Reform Law

    Issue Brief

    This brief compares the Medicaid and Children's Health Insurance Program provisions in the new health reform law with pre-reform law governing those programs. The analysis focuses on Medicaid coverage and financing changes; how Medicaid and CHIP will interface with a new health insurance exchange and other Medicaid benefits and access changes. Overall, the new law includes an individual requirement to obtain health insurance, a significant Medicaid expansion and subsidies to help low-income individuals buy coverage…

  • Medicaid and the Budget Control Act: What Options Will Be Considered?

    Issue Brief

    On August 2, 2011, President Obama signed the Budget Control Act of 2011 into law. The Act was designed to reduce federal spending and raise the debt ceiling. It established the Joint Select Committee, also known as the “Super Committee,” tasked with decreasing projected deficits by $1.5 trillion between FY2012 and FY2021. The Committee has broad authority to propose changes to meet its target, including changes to Medicare, Social Security, Medicaid, defense, taxes, and any…

  • Additional Findings from the National Surveys of Doctors and Pharmacists

    Poll Finding

    Two Kaiser Family Foundation national surveys of doctors and pharmacists examine additional findings on their views and experiences on a wide range of health care issues. The topics covered in the surveys include views and experiences with medical errors and quality issues, use of health care information technology, prescription drug advertisements, views on Medicaid provisions, doctors' willingness to see Medicaid and Medicare patients, and physicians' views of conscience-clause provisions. The Kaiser Family Foundation National Survey…

  • Medicaid and Long-Term Care: Recent Publications Illuminate Key Policy Issues

    Fact Sheet

    With recent policy debates about the future of Medicaid, the Foundation's Kaiser Commission on Medicaid and the Uninsured has created a resource page of recent publications that address key policy issues when examining Medicaid's role for high cost populations and in long-term care. Of particular interest are a report profiling six Medicaid populations with serious health needs resulting in high costs for the program and a recent analysis showing more than half (52%) of Medicaid…

  • Joe Biden’s New Health Care Agenda (and CMS’s Big Role In It)

    From Drew Altman

    With the Georgia runoff elections giving Democrats control of the U.S. Senate, Drew Altman discusses President-elect Biden’s potential health care agenda and suggests that the Centers for Medicare & Medicaid Services could have an expanded role and that it may be time to rename it and elevate it to a cabinet agency.

  • Despite Efforts to Slow the Spread of the Virus in Long-Term Care Facilities, KFF Analysis Finds Many States Experienced the Worst COVID-19 Outbreaks and Highest Number of Deaths in December

    News Release

    For some regions of the country, recent months have brought the worst COVID-19 outbreaks in long-term care facilities since the start of the pandemic, a new KFF analysis of state-reported cases and death shows, underscoring the importance of current efforts to vaccinate this high priority group. The novel coronavirus has had a disproportionate impact on older adults in general and nursing home and other long-term care facility residents and staff in particular. Six percent of…

  • How Can Trump Administration Regulations Be Reversed?

    Issue Brief

    With the inauguration of President Biden and Democrats holding a slim majority in Congress, policymakers are likely to consider whether and how to reverse various health policy regulations issued by the Trump Administration.