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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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  • Current Issues in Medicaid:  A Mid-FY2008 Update Based on a Discussion with Leading Medicaid Directors

    Report

    Current Issues in Medicaid: A Mid-FY2008 Update Based on a Discussion with Leading Medicaid Directors This report provides a brief mid-fiscal year 2008 update on current issues in Medicaid, from the perspective of state Medicaid directors who administer the program. Medicaid directors identified a number of key issues, concerns and priorities in mid fiscal year 2008. At the top of the list were the effects of an increase in fiscal stress across states, a number…

  • Health Coverage for Children and Families in Medicaid and SCHIP:  State Efforts Face New Hurdles

    Report

    Health Coverage for Children and Families in Medicaid and SCHIP: State Efforts Face New Hurdles The seventh annual 50-state survey of eligibility rules, enrollment and renewal procedures, and cost-sharing practices in Medicaid and SCHIP for children and families reports that nearly two-thirds of states expanded access to Medicaid and SCHIP between July 2006 and January 2008. Executive Summary (.pdf) Report (.pdf)

  • Medicaid’s Role for People With Disabilities

    Event

    Diane Rowland testified before the House Energy and Commerce Subcommittee on Health about Medicaid’s development as a vital source of coverage for people with disabilities and its current role providing coverage and access to health services and supports for this population. Testimony (.pdf)

  • New Requirements for Citizenship Documentation in Medicaid

    Fact Sheet

    This fact sheet provides information on the new federal requirement that all U.S. citizens and nationals applying for or renewing their Medicaid coverage provide documentation of their citizenship status and examines the implications for Medicaid beneficiaries and the states. Fact Sheet (.pdf) Previous versions January 2007 (.pdf) July 2006 (.pdf)

  • Nursing Home Reform: Then and Now

    Video

    To mark the 20th anniversary of the passage of landmark federal legislation to improve the quality of nursing home care, the Omnibus Budget Reconciliation Act of 1987 (known as OBRA 87), this video examines the history surrounding the law. The video includes a look at the state of nursing home care before the law, an overview of the legislative process that brought about the law, and recent developments in nursing home quality. The video features…

  • New Resources and Briefing Explore Nursing Home Reform Twenty Years After Passage of Landmark Law

    Event Date:
    Event

    To mark the 20th anniversary of the passage of landmark federal legislation to improve the quality of nursing home care, the Omnibus Budget Reconciliation Act of 1987 (known as OBRA 87), the Kaiser Family Foundation released new resources and cosponsored a Washington, D.C. briefing. Among the resources released were new opinion poll results on the public’s views about the quality of long-term care services in the United States; the short film, “Nursing Home Reform: Then…

  • Nursing Home Care Quality:  Twenty Years After the Omnibus Budget Reconciliation Act of 1987

    Report

    Nursing Home Care Quality: Twenty Years After the Omnibus Budget Reconciliation Act of 1987 To mark the 20th anniversary of the passage of landmark federal legislation to improve the quality of nursing home care, the Omnibus Budget Reconciliation Act of 1987 (known as OBRA '87), this report explains the key provisions of OBRA ’87 related to nursing home care and examines the progress and problems in quality assurance in nursing homes over the past twenty…

  • Children’s Health Insurance Program Reauthorization Act of 2007 (CHIPRA):  The revised CHIPRA Bill (H.R. 3963) Compared to the Original Bill (H.R. 976)

    Issue Brief

    Children’s Health Insurance Program Reauthorization Act of 2007 (CHIPRA): The revised CHIPRA Bill (H.R. 3963) Compared to the Original Bill (H.R. 976) The U.S. House and Senate passed a revised version of Children’s Health Insurance Program Reauthorization Act of 2007 (CHIPRA) that was intended to address key concerns of opponents of the original bill vetoed by the President. The State Children’s Health Insurance Program is temporarily funded through December 14 at current levels, but requires…

  • Medicaid Enrollment & Spending Trends

    Fact Sheet

    Medicaid Enrollment and Spending Trends This fact sheet summarizes trends of enrollment and spending in the Medicaid program from 2000 to 2006. Fact Sheet, October 2007 (.pdf) Previous Versions: May 2006 (.pdf) June 2005 (.pdf) February 2001 (.pdf) September 1999 (.pdf) October 1998 (.pdf)

  • New Survey Indicates Medicaid Enrollment Declines For First Time In Nearly A Decade

    Event Date:
    Event

    The annual 50-state survey of state officials on Medicaid and state budget actions reports enrollment in Medicaid declined for the first time in nearly a decade. The 0.5 percent enrollment decline in fiscal year 2007 was driven primarily by two factors. States reported that the new citizenship documentation requirements were causing significant delays in processing applications, affecting mostly individuals already eligible for the program. State officials also cited the good economy and lower unemployment for…