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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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  • Community Health Centers in a Time of Change: Results from an Annual Survey

    Issue Brief

    With health centers playing an important role in the response to the coronavirus pandemic, findings from the KFF/Geiger Gibson 2019 Community Health Center Survey provide important information on health centers’ financial situation and their experiences in a changing policy environment. After years of growth following implementation of the Affordable Care Act (ACA), changes in Medicaid, public charge, and Title X family planning policies, among others, carry important implications for low-income patients as well as health…

  • States are Shifting How They Cover Prescription Drugs in Response to COVID-19

    Policy Watch

    Medicaid beneficiaries, particularly those with chronic conditions, will need access to medications even during social distancing and their ability to meet with providers to obtain refills may be hindered. States are updating policies to allow beneficiaries to access medications during this public health emergency.

  • COVID-19 Poses a Particular Threat to Low-Wage Workers’ Physical and Financial Health

    News Release

    The nation’s low-wage workers face a particular kind of bind. They tend to work in service industries -- such as the restaurant, hospitality and retail sectors – that are especially at risk for loss of income during the COVID-19 pandemic, or in jobs such as health care workers, grocery store workers and delivery drivers, where they may continue to work but face a higher risk of contracting the disease. According to a new KFF analysis,…

  • Racial and Ethnic Disparities in COVID-19 Cases and Deaths in Nursing Homes

    Issue Brief

    This data note presents national data that shows that nursing homes with a high share of Black or Hispanic residents were more likely to have at least one coronavirus case, at least one COVID-19 death, and (among facilities with cases) more severe case outbreaks than facilities with a low share of Black or Hispanic residents. This piece also includes state-level data from 21 states where a sufficient sample of facilities with a high share of…

  • The COVID-19 Pandemic Has Taken a Higher Toll on Nursing Homes with Relatively High Shares of Black or Hispanic Residents

    News Release

    Nursing homes with a relatively high share of Black or Hispanic residents are more likely to have had a resident die of COVID-19 than homes with lower shares of such residents, finds a new KFF analysis. Nationwide, 63 percent of nursing homes with a relatively high share of Black residents reported one or more COVID-19 death, as did 55 percent of nursing homes with a relatively high share of Hispanic residents, finds the analysis. That…

  • Federal Medicaid Outlays During the COVID-19 Pandemic

    Issue Brief

    This data note analyzes federal Medicaid outlays before and during the COVID-19 pandemic. In the one year since the onset of the pandemic, federal Medicaid outlays totaled $500.8 billion and grew by 19.5%, compared to 6.3% growth in the one year before the pandemic.

  • Impact of Coronavirus on Community Health Centers

    Issue Brief

    Community health centers are a national network of safety net primary care providers that fill an important role in national, state, and local responses to the coronavirus pandemic. This brief presents findings from new data that provide insights into how health centers are adapting their services in response to the pandemic and how coronavirus is affecting their operations and long-term financial outlook with patient visits and revenue from those visits dropping precipitously.