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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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  • A Guide to the Supreme Court’s Affordable Care Act Decision

    Issue Brief

    This policy brief describes the Supreme Court's decision on the Affordable Care Act and looks ahead to the implementation of health reform now that questions about the constitutionality of the law have been resolved. Brief (.pdf)

  • Infographic: Medicaid Spending & Enrollment

    Interactive

    This infographic illustrates that while the majority of people served by Medicaid are children and families, most Medicaid spending – two of every three dollars – goes to care for elderly enrollees and people with disabilities.

  • CHIP Enrollment: June 2011 Data Snapshot

    Issue Brief

    This data snapshot provides the latest data on Children's Health Insurance Program (CHIP) enrollment and policy trends nationally and across the states through June 2011, based on survey responses and data provided by CHIP directors in all 50 states and the District of Columbia. The report finds that in June 2011, the number of children enrolled in CHIP reached 5.3 million. From June 2010 to June 2011, an additional 178,000 children enrolled in CHIP programs…

  • Children and Oral Health: Assessing Needs, Coverage and Access

    Issue Brief

    This policy brief highlights the prevalence of dental problems among children and examines gaps in oral health coverage and access to dental care, as well as disparities by income and race/ethnicity. It also looks at out-of-pocket costs for dental care, explains the role of Medicaid and CHIP in dental care, coverage and access for children and describes the expansion of oral health coverage for children under the Affordable Care Act. Issue Brief (.pdf)

  • Articles Examine Data and Issues For Expanding Integrated Care Models For Dual-Eligible Beneficiaries

    Report

    As state and federal policymakers move to develop and test integrated care models for people dually eligible for Medicare and Medicaid, two new Kaiser Family Foundation articles in the June 2012 issue of Health Affairs highlight the diverse needs and challenges facing these 9 million beneficiaries, describe their current care arrangements, and raise issues to consider for proposed reforms aimed at better coordinating their care and reducing health care spending. The first highlights the diversity…

  • Access to Affordable Dental Care: Gaps for Low-Income Adults

    Issue Brief

    This policy brief provides data and analysis of coverage and access to oral health care for low-income nonelderly adults. Lack of resources to pay for dental services, either through dental insurance or out-of-pocket, is a major barrier to oral health care for many low-income Americans. The problem is particularly acute for low-income adults, who are more likely to be uninsured than low-income children. Issue Brief (.pdf)

  • A Focus Group with Medicaid Directors: As FY 2012 Ends, Looking Toward FY 2013

    Report

    This report is based on a focus group discussion in May 2012 with the Executive Board of the National Association of Medicaid Directors (NAMD) and other leading Medicaid directors. The group of nine directors reflected perspectives from various regions of the country. The discussion focused on state fiscal conditions, Medicaid spending and enrollment trends, key Medicaid policy changes and federal health care reform implementation. At the time of the meeting, most states were wrapping up…

  • Oral Health in the U.S.: Key Facts

    Fact Sheet

    This fact sheet provides data on oral health care coverage and access for children, nonelderly adults and Medicaid beneficiaries, including state-by-state data on measures such as the share of adults who have had a dental visit within the past year. Fact Sheet (.pdf)

  • Pulling it Together: Duals: The National Health Reform Experiment We Should Be talking More About

    From Drew Altman

    The Center for Medicare & Medicaid Services (CMS) and 26 states are moving to launch a large scale managed care demonstration project potentially involving millions of the poorest, sickest, most expensive Medicare and Medicaid beneficiaries, the so-called dual eligibles. The experiment is getting more and more attention from policy experts, but with controversial issues like the survival of the Affordable Care Act and converting Medicare to a premium support program grabbing the limelight, it has…