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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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  • How the Midterms Factor Into Medicaid Expansion

    From Drew Altman

    In this column for The Wall Street Journal’s Think Tank, Drew Altman discusses how Democratic victories in several close gubernatorial races on Tuesday could revive efforts to expand Medicaid.

  • The ACA Primary Care Increase: State Plans for SFY 2015

    Perspective

    This perspective provides additional information on state plans related to the Affordable Care Act's (ACA) primary care rate increase after the 100% federal financing ends December 31, 2014. The data in this report were collected as part of KCMU’s Annual Medicaid Budget Survey, conducted by Health Management Associates with the support of the National Association of Medicaid Directors,

  • Comprehensive Medicaid Managed Care Models

    Feature

    Comprehensive Medicaid Managed Care Models in the States 2014 Download Source SOURCE: KCMU survey of Medicaid officials in 50 states and DC conducted by Health Management Associates, October 2014.

  • Medicaid in an Era of Change: Findings from the Annual Kaiser 50-State Medicaid Budget Survey at a Forum with the National Association of Medicaid Directors

    Event Date:
    Event

    At 9:30 a.m. ET Tuesday, Oct. 14, the Kaiser Family Foundation’s Commission on Medicaid and the Uninsured (KCMU) released its 14th annual 50-state Medicaid budget survey for state fiscal years 2014 and 2015. Kaiser and the National Association of Medicaid Directors (NAMD) held a joint briefing to discuss key findings and highlight trends and changes in Medicaid programs around the country.

  • States Expanding Medicaid Under the Affordable Care Act Expect 18% Enrollment Growth in Fiscal Year 2015, With Federal Funds Picking Up Most of the Cost

    News Release

    States expect the number of people enrolled in Medicaid will increase an average of 13.2 percent across the country in state fiscal year 2015 (which runs through June in most states), showing the early effects of the first full year of Affordable Care Act implementation, according to the 14th annual 50-State Medicaid budget survey by the Kaiser Family Foundation’s Commission on Medicaid and the Uninsured (KCMU).

  • Medicaid spending and enrollment are affected by changes in economic conditions and policy.

    Feature

    Medicaid Spending and Enrollment are Affected by Changes in Economic Conditions and Policy Download Source SOURCE: Medicaid Enrollment June 2013 Data Snapshot, KCMU, January 2014. Spending Data from KCMU Analysis of CMS Form 64 Data for Historic Medicaid Growth Rates.  FY 2014 and 2015 data based on KCMU survey of Medicaid officials in 50 states and DC conducted by Health Management Associates, October 2014.

  • Implementing the ACA: Medicaid Spending & Enrollment Growth for FY 2014 and FY 2015

    Issue Brief

    This report provides an overview of Medicaid financing and Medicaid spending and enrollment growth with a focus on state fiscal years 2014 and 2015 (FY 2014 and FY 2015.) Findings are based on interviews and data provided by state Medicaid directors as part of the 14th annual survey of Medicaid directors in all 50 states and the District of Columbia conducted by the Kaiser Commission on Medicaid and the Uninsured (KCMU) survey with Health Management…

  • Putting Medicaid in the Larger Budget Context: An In-Depth Look at Four States in FY 2014 and 2015

    Issue Brief

    This report provides an in-depth examination of Medicaid program changes in the larger context of state budgets in four states: Michigan, Utah, Virginia, and West Virginia. These case studies build on findings from the 14th annual budget survey of Medicaid officials in all 50 states and the District of Columbia conducted by the Kaiser Commission on Medicaid and the Uninsured and Health Management Associates (HMA.)

  • Medicaid in an Era of Health & Delivery System Reform: Results from a 50-State Medicaid Budget Survey for State Fiscal Years 2014 and 2015

    Report

    This report provides an in depth examination of the changes taking place in state Medicaid programs across the country. The findings in this report are drawn from the 14th annual budget survey of Medicaid officials in all 50 states and the District of Columbia conducted by the Kaiser Commission on Medicaid and the Uninsured and Health Management Associates (HMA), with the support of the National Association of Medicaid Directors. This report highlights policy changes implemented…