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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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  • Health Insurance for Unemployed Workers

    Event Date:
    Event

    Submitted testimony of Diane Rowland, executive director of the Commission, about health insurance options for unemployed workers. She was scheduled to testify to the U.S. Senate Committee on Health, Education, Labor, and Pensions, but the hearing was postponed.

  • Women and Medicare

    Fact Sheet

    Medicare is a critical source of health insurance coverage for virtually all older women in the U.S. and for many younger women who have permanent disabilities. Because women have longer life expectancies than men, more than half (57%) of the people covered by the program are women. In 1999, there were 21 million women on Medicare 19 million ages 65 and over and another 2 million women under age 65 with disabilities who received Social…

  • Medicaid: Purchasing Prescription Drugs

    Issue Brief

    Medicaid: Purchasing Prescription Drugs A policy brief explaining how Medicaid purchases outpatient drugs and outlining the policy tools available to states to limit the rate of growth in spending on prescription drugs. Policy Brief (28 pages)

  • Medicare Beneficiaries and Their Assets: Implications for Low-Income Programs

    Report

    This report, prepared by Marilyn Moon of The Urban Institute and Robert Friedland and Lee Shirey of Georgetown University's Center on an Aging Society, reviews the income and assets of the current Medicare population, provides an overview of asset tests used to determine eligibility for programs assisting low-income Medicare beneficiaries, and considers how alternative policy options would affect eligibility for these programs. The authors find that beneficiaries with low incomes tend to have minimal assets.…

  • Medicare+Choice in California: Lessons and Insights

    Report

    Thirty-five percent of all California Medicare beneficiaries are enrolled in a M+C plan, far in excess of the 14 percent rate nationwide. This report seeks to identify what lessons for the nation can be drawn from the California M+C experience, as Congress debates the implications of major withdrawals from the M+C program and potential policy changes aimed at reversing this trend. The report is based largely on analysis of M+C data on plan participation, withdrawals,…

  • SCHIP Program Enrollment: December 2002 Update

    Report

    This report presents information on the number of children enrolled in SCHIP for each state, for specific months from 1998 to December 2002. As of December 2002, the SCHIP program covered 3.7 million low-income children. An increase of 280,000 children during 2002. Report

  • Medicaid Facts: Medicaid’s Role for Children

    Fact Sheet

    Medicaid Facts: Medicaid's Role for Children This fact sheet provides an overview of children's eligibility and coverage under Medicaid, summarizes Mediciad benefits and expenditures for children, and highlights key issues facing the program as it continues to serve children. Fact Sheet Fact Sheet

  • Native Americans and Medicaid: Coverage and Financing Issues

    Other Post

    Native Americans and Medicaid:Coverage and Financing Issues Medicaid and Welfare Until 1996, families with children who received cash assistance under the Aid to Families with Dependent Children (AFDC) program were automatically entitled to Medicaid coverage. The welfare law enacted that year, Public Law 104-193, repealed the AFDC program and created a Temporary Assistance for Needy Families (TANF) block grant to the states. The 1996 welfare law also severed the automatic eligibility linkage between welfare and…

  • Medicaid Eligibility for Families and Children – Issue Paper

    Report

    Medicaid Eligibility for Families and Children September 1998 Measured by enrollment, Medicaid is the largest health insurer in the country. According to the Urban Institute's estimates, Medicaid covered 41.3 million Americans in 1996; Medicare, in comparison, covered 38 million. Moreover, millions of low-income Americans without private health insurance coverage are eligible for Medicaid but are not enrolled in the program. For example, researchers at the Agency for Health Care Policy Research recently estimated that in…