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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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  • Eliminating Adult Dental Coverage in Medicaid: An Analysis of the Massachusetts Experience

    Report

    This report examines the impact of Massachusetts eliminating coverage of most dental services for adults in its Medicaid program, MassHealth. The report findings include: In FY2004, 100,000 fewer MassHealth adult enrollees received dental services reimbursed by MassHealth than in FY2001, the year prior to the reductions; The number of private dentists actively treating MassHealth patients declined after the reductions, and dental directors at community health centers (CHCs) indicated that they did not have the capacity…

  • Survey of Hurricane Katrina Evacuees

    Report

    To give voice to people whose lives have been devastated by Hurricane Katrina and the ensuing floods, The Washington Post, the Kaiser Family Foundation, and the Harvard School of Public Health conducted a unique survey of evacuees in shelters in the Houston area. The provides information on evacuees' lives before the hurricane and inside Houston area shelters, as well as their plans for the future. The survey also includes a number of health-related questions, including…

  • SCHIP Enrollment in 50 States

    Other Post

    This update shows that enrollment in SCHIP grew by 25,000 to 3,950,000 in 2004, reversing a four quarter decline in enrollment since June 2003, but still slightly below the program's enrollment peak. Report (.pdf)

  • Medicaid Enrollment in 50 States: June 2004 Data Update

    Other Post

    This update on Medicaid enrollment in 50 states demonstrates that in June 2004, a total of 41.3 million persons were enrolled in Medicaid, an increase of 1.6 million or 4.1 percent from June 2003. Medicaid enrollment nationally has increased at every six-month interval since December 1998. Report (.pdf)

  • Addressing the Health Care Impact of Hurricane Katrina

    Issue Brief

    This issue paper is an effort to begin an assessment of health care needs in the wake of Hurricane Katrina and to review some of the policy options available to the federal government to ensure access to health care for those affected by Katrina. The brief begins with a summary of the implications for the health of the population and its access to needed care. It then outlines the implications for affected states – those…

  • Who Stays and Who Goes Home: Using National Data on Nursing Home Discharges and Long-Stay Residents to Draw Implications for Nursing Home Transition Programs

    Report

    This report analyzes survey data to describe the characteristics of two groups of nursing home residents who are 65 years or older: those who are discharged back to the community over a one year time period and those who remain in nursing homes for 90 days or longer. Over the last several years, some states have turned their attention to returning nursing home residents to community settings through nursing home transition programs. The findings provide…

  • Medicaid and the 2003-05 Budget Crisis–State Case Studies

    Other Post

    This series of case studies examines how eight states (Alabama, California, Colorado, Massachusetts, Michigan, New York, Texas, and Washington) from around the nation responded to their budget crises from 2003 to 2005, with a focus on how Medicaid and State Children's Health Insurance Programs were affected. Additionally, an overview of the eight states' experiences was published in the journal Health Affairs. Health Affairs article (free access)Three Years Of State Fiscal Struggles: How Did Medicaid And…

  • Coverage Gains Under Recent Section 1115 Waivers: A Data Update

    Issue Brief

    This brief assesses the extent to which recent Section 1115 waivers have helped reduce the number of uninsured people and finds that there has been a net gain in coverage of 426,329 people under recent waivers. Issue Paper (.pdf)

  • Medicaid 1915(c) Home and Community-Based Service Programs: Data Update

    Issue Brief

    Over the last four years, the Commission has been tracking the national development of the three main Medicaid HCBS programs that states can operate. The Commission also began to survey the policies, such as eligibility criteria and waiting lists that states can use to control the growth of spending on the waiver programs. This brief presents the latest data on the development of home and community-based service programs in Medicaid. Issue Paper (.pdf)

  • Ten Myths About Medicaid

    Issue Brief

    This issue brief outlines ten key myths and related facts about Medicaid.