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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 Expansion Through Marketplace Premium Assistance

    Fact Sheet

    This fact sheet compares the two Medicaid premium assistance authorities (state plan option and demonstration waiver) and identifies key beneficiary protections in Medicaid expansion premium assistance programs.

  • Health Affairs Article: Medicaid Expansion: Chronically Homeless Adults Will Need Targeted Enrollment and Access to a Broad Range of Services

    Issue Brief

    Homeless adults may gain access to health services under the Affordable Care Act’s Medicaid expansion, which takes effect in 2014. This study, published in Health Affairs, analyzed the health coverage, health status, and health services use of 725 chronically homeless adults with disabilities in eleven cities in the United States.

  • Medicaid’s Role for Dual-Eligible Beneficiaries

    Issue Brief

    This brief examines the role of Medicaid in providing health coverage to the 9.6 million Medicare beneficiaries who are also eligible for Medicaid. The brief explains the role Medicaid plays in providing supplemental coverage to fill in the gaps in Medicare’s coverage for these dual-eligible beneficiaries.

  • CHIP Enrollment: June 2012 Data Snapshot

    Issue Brief

    This issue brief updates monthly enrollment data for the Children's Health Insurance Program (CHIP) across all 50 states and DC to include June 2012 data.

  • Medicaid Enrollment: June 2012 Data Snapshot

    Issue Brief

    This issue brief updates our monthly Medicaid enrollment figures to include data as of June 2012. The issue brief discusses enrollment trends across all 50 states and DC as well as within select groups such as Families, the Aged & Disabled, as well as adult expansions (largely focusing on adults without dependent children or childless adults).

  • Aligning Eligibility for Children: Moving the Stairstep Kids to Medicaid

    Issue Brief

    The Affordable Care Act (ACA) requires that Medicaid cover children with incomes up to 133 percent of the federal poverty level (FPL) ($31,322 for a family of four in 2013) as of January 2014. Today, there are “stairstep” eligibility rules for children. States must cover children under the age of six in families with income of at least 133 percent of the FPL in Medicaid while older children and teens with incomes above 100 percent…

  • What is Medicaid’s Impact on Access to Care, Health Outcomes, and Quality of Care? Setting the Record Straight on the Evidence

    Issue Brief

    Medicaid now covers more than 1 in every 5 Americans, and millions of uninsured individuals will become newly eligible for Medicaid under the ACA. Considering Medicaid’s large and growing coverage role, an evidence-based assessment of the program’s impact on access to care, health outcomes, and quality of care is of major interest. This brief takes a look at what the research literature shows regarding the difference Medicaid makes.

  • Testimony: What would strengthen Medicaid Long-Term Services and Supports?

    Issue Brief

    On August 1, 2013, Diane Rowland, Executive Vice President of the Kaiser Family Foundation and Executive Director of the Foundation's Kaiser Commission on Medicaid and the Uninsured, testified before the Federal Commission on Long-Term Care about ways in which the Medicaid program could be strengthened to better support low-income individuals with long-term services and supports needs.