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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’s Most Costly Outpatient Drugs

    Issue Brief

    Using Medicaid State Drug Utilization Data, this brief presents the 50 most costly drugs before rebates used by the Medicaid program over the January 2014 through June 2015 period. It then examines reasons why these drugs are so costly; explores case studies on opioids, hepatitis C drugs, and the drug Abilify; and considers policy implications.

  • Where President-elect Donald Trump Stands on Six Health Care Issues

    Issue Brief

    Where does President-elect Donald Trump stand on key health care issues? This snapshot outlines his positions and policy statements during the campaign on issues such as health insurance, the ACA, Medicaid, Medicare, the opioid epidemic, prescription drug costs, and women's reproductive health.

  • Linking Medicaid and Supportive Housing: Opportunities and On-the-Ground Examples

    Issue Brief

    There is evidence that supportive housing can contribute to improved outcomes for people experiencing homelessness or at risk of homelessness. It can also advance community integration of seniors and people with disabilities. Medicaid does not pay for room and board, but it can pay for many housing-related services for Medicaid beneficiaries. This issue brief discusses how Medicaid can support integrated strategies and profiles three initiatives that illustrate different approaches to linking Medicaid and supportive housing.

  • The Health Care Plan Trump Voters Really Want

    From Drew Altman

    In a New York Times op-ed, Drew Altman draws on observations from focus groups in rust belt states of people in the Affordable Care Act (ACA) marketplaces who voted for President-elect Trump and say they may not like their coverage under the ACA but could like Republican replacement plans even less.

  • Interactive Maps: Estimates of Enrollment in ACA Marketplaces and Medicaid Expansion

    Interactive

    As the 115th U.S. Congress deliberates the future of the Affordable Care Act, also known as Obamacare, an interactive map from the Kaiser Family Foundation provides estimates of the number of people in each congressional district who enrolled in a 2017 ACA marketplace health plan and the political party of each district’s representative as of October 2017. The analysis also includes maps charting the total number of people enrolled under the ACA Medicaid expansion in…

  • Data Note: Estimated Medicaid Savings in the House Budget Resolution from March 2016

    Issue Brief

    While the current Budget Resolution under consideration will set the framework for a repeal of the ACA, the Budget Resolution that passed in March 2016 provides insight into other Medicaid cuts that could be considered by Congress later this year. This Data Note examines proposed reductions in federal Medicaid funding under the March 2016 House Budget Resolution.

  • A Final Look: California’s Previously Uninsured after the ACA’s Third Open Enrollment Period

    Report

    The Kaiser Family Foundation California Longitudinal Panel Survey is a series of surveys that, over time, tracked the experiences and views of a representative, randomly selected sample of Californians who were uninsured prior to the major coverage expansions under the Affordable Care Act (ACA). The initial baseline survey was conducted with a representative sample of 2,001 nonelderly uninsured Californian adults in summer 2013, prior to the ACA’s initial open enrollment period. After each enrollment period…

  • CMS’s Denial of Proposed Changes to Medicaid Expansion in Ohio

    Fact Sheet

    This fact sheet discusses CMS's denial of Ohio's proposed changes to its existing Medicaid expansion . It also provides an overview of the proposed changes as included in the state's Section 1115 demonstration waiver application.

  • New Survey Finds 72% of Previously Uninsured Californians Now Have Coverage, Including 78% of Those Eligible for New Affordable Care Act Options

    News Release

    For Remaining Uninsured Residents, Cost and Immigration Status Are Main Obstacles Three years after the Affordable Care Act’s coverage expansions were fully implemented in California, nearly three quarters (72%) of the state’s previously uninsured residents now have health coverage, finds the fourth Kaiser Family Foundation Longitudinal Panel Survey, which is tracking the experiences of a randomly selected group of Californian adults who were uninsured in 2013. This is similar to the share who reported having insurance…

  • Medicaid Coverage of Family Planning Benefits: Results from a State Survey

    Report

    This survey of states’ Medicaid family planning policies under fee-for-service finds wide coverage of most prescription contraceptives among 40 states and the District of Columbia (DC), but variable coverage of emergency contraceptives and other family planning-related services. It is the first published report on state coverage of family planning benefits since the passage of the Affordable Care Act (ACA).