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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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  • Managed Care And Low-Income Populations: A Case Study of Texas

    Report

    This study is part of a larger initiative, funded by both the Henry J. Kaiser Family Foundation and The Commonwealth Fund. Case studies of seven states that are restructuring their health care systems for the Medicaid and uninsured populations: California, Florida, Minnesota, New York, Oregon, Tennessee, and Texas, are designed to provide early insights and timely analyses that will help states and other efforts shape rapidly evolving managed care systems and health reform programs for…

  • The Difference Different Approaches Make: Comparing Proposals to Expand Health Insurance

    Report

    The Difference Different Approaches Make: Comparing Proposals to Expand Health Insurance This paper estimates and compares the impacts of alternative mechanisms for expanding health insurance coverage. A variety of approaches-expansions of existing public programs, direct subsidies, and tax credits-and target populations-including children, poor adults, parents of Medicaid- or CHIP-covered children, and early retirees-are considered. The impacts of the proposals on coverage, costs and other program outcomes are compared. This paper is part of the Kaiser…

  • Medicaid Enrollment in 21 States: June 1997 – June 1999

    Report

    This report, Medicaid Enrollment in 21 States: June 1997 -June 1999, prepared by Health Management Associates, includes enrollment data obtained directly from state Medicaid and CHIP programs. Findings show that across the 21 states, which represent 73% of total Medicaid enrollment, enrollment fell from 23.2 million in June 1997 to 22.6 million in June 1998, but turned upward in June 1999 to 22.9 million. State-by-state data is included for: Arkansas, California, Florida, Georgia, Ilinois, Indiana,…

  • Making Medicaid Managed Care Work: An Action Plan for People Living With HIV

    Report

    This is an update of an earlier report also prepared by The National Association of People with AIDS (NAPWA), with support from the Foundation. That report was the product of a 1996 meeting of people with HIV, their advocates, and researchers designed to provide information about Medicaid managed care for people with HIV. This new report updates information to reflect changes in the policy and regulatory environment since that time. Report (.pdf)

  • New Medicaid Data from 21 States Find Recent Enrollment Increases

    Report

    New data prepared for the Kaiser Commission on Medicaid and the Uninsured released April 12 find recent Medicaid enrollment increases in more than half of the 21 states surveyed. A companion report describes survey results on ways states are trying to simplify the enrollment process. Report News Release: New Medicaid Data from 21 States Finds Recent Enrollment Increases in 12 States

  • Managed Care and Low Income Populations in Texas: 1996-1998 Update

    Report

    This report, Managed Care and Low-Income Populations in Texas: 1996-1998 Update, updates our 1996 case study of Texas' Medicaid managed care initiatives and their affect on low-income populations. The authors conclude that Medicaid managed care in Texas has had mixed results. It is one of a series of reports from the Kaiser/ Commonwealth Low-Income Coverage and Access Project. This project examines how changes in the Medicaid program have affected health insurance coverage and access to…

  • Building Strong Medicaid Managed Care Programs: A Guide To Help Consumer Advocates Participate in Strengthening HIV/AIDS Provisions in Managed Care

    Report

    This new report, prepared by NAPWA with support of the Foundation, grew out of a key recommendation in the Making Medicaid Managed Care Work report, and is designed to provide people with HIV and their advocates with the tools for understanding Medicaid managed care contracts and for working with states to make them responsive to the needs of people with living with HIV. Report (.pdf)

  • The Basics of Medicaid

    Other Post

    The Kaiser Commission co-sponsored a policy briefing on the basics of the Medicaid program, including eligiblity, financing, and benefits. Links to the presentation slides, fact sheets, and a select legislative history of this coverage program for low-income and disabled individuals are available below. Medicaid 101 Presentation Slides Medicaid Legislative History The Medicaid Program at a Glance Medicaid Enrollment and Spending Trends Medicaid and Managed Care Medicaid and Prescription Drugs Webcast of Policy Briefing