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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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  • 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…

  • NPR/Kaiser/Harvard Survey: Public Views on SCHIP Reauthorization

    Poll Finding

        This October 2007 survey conducted jointly by NPR, the Kaiser Family Foundation, and the Harvard School of Public Health examines the public’s views and opinions of the State Children’s Health Insurance Program (SCHIP) and the pending legislation surrounding its reauthorization. The survey assesses the public’s familiarity with the SCHIP debate, whether or not they support the renewal and expansion of the program, and who they believe should be eligible for health coverage through…

  • NPR/KFF/HSPH Survey: Public Views on SCHIP Reauthorization: Topline

    Poll Finding

    These toplines present detailed survey results from an October 2007 survey conducted jointly by NPR, the Kaiser Family Foundation, and the Harvard School of Public Health on the public’s views and opinions of the State Children’s Health Insurance Program and the pending legislation surrounding its reauthorization. Toplines (.pdf)

  • NPR/KFF/HSPH Survey: Public Views on SCHIP Reauthorization: Summary

    Poll Finding

    This summary provides an overview of the results of an October 2007 survey conducted jointly by NPR, the Kaiser Family Foundation, and the Harvard School of Public Health on the public’s views and opinions of the State Children’s Health Insurance Program and the pending legislation surrounding its reauthorization. Summary (.pdf)

  • Why Did Medicaid Spending Decline in 2006?  A Detailed Look at Program Spending and Enrollment, 2000-2006

    Issue Brief

    Why Did Medicaid Spending Decline in 2006? A Detailed Look at Program Spending and Enrollment, 2000-2006 This issue brief finds that Medicaid spending declined for the first time in the program’s 40-plus year history in Federal Fiscal Year (FY) 2006, falling by 0.2 percent. The two major factors that underlie the 2006 decline, in addition to a more limited effect of the slowdown in per enrollee spending growth for a few key services, were the…

  • An Overview of Medicaid Enrollees with Diabetes in 2003

    Issue Brief

    Diabetes was the sixth leading cause of death in the US in 2004 and is among the top 10 most expensive medical conditions on the country. Although more than one in seven diabetics in America rely on the Medicaid program for their health coverage, little is known about who they are or what the program spends on their behalf. This brief provides a first look at what Medicaid spends on the nearly 2 million enrollees…

  • Long-Term Service and Supports: The Future Role and Challenges for Medicaid

    Report

    This report examines the structure and impact of Medicaid’s role in long-term care. Based on a roundtable discussion of policy makers and experts and drawn from a body of health services research, the report highlights policy challenges facing the Medicaid program today and identifies issues in providing long-term care going forward. By gathering evidence to address key policy issues, such as integrating services, benefit design, quality monitoring and financing, the report can serve as a…

  • SCHIP Reauthorization: Key Questions in the Debate – A Description of New Administrative Guidance and the House and Senate Proposals – Issue Brief

    Issue Brief

    SCHIP Reauthorization: Key Questions in the Debate – A Description of New Administrative Guidance and the House and Senate Proposals The U.S. Senate and the House of Representatives have approved legislation to reauthorize the State Children's Health Insurance Program (SCHIP), which covers six million low-income children today. With the release of the Census health coverage numbers, this updated brief answers key questions that explain the ongoing policy debate about this public health coverage program, which…

  • Making Sense of Recent Estimates of Eligible but Uninsured Children

    Issue Brief

    As Congress reauthorizes the State Children’s Health Insurance Program (SCHIP), accurate estimates of the number of children who are eligible for Medicaid and SCHIP but remain uninsured are critical for policy and budget development. The Congressional Budget Office (CBO) concluded that there are between 5 and 6 million children who are uninsured and eligible for Medicaid and SCHIP. CBO’s assessment is in sharp contrast to estimates released recently by the Bush Administration that indicating there…