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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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  • How the ACA Changes Pathways to Insurance Coverage for People with HIV

    Perspective

    There are multiple sources of insurance coverage and care for people with HIV in the United States.  These include public programs, such as Medicaid and Medicare, and the Ryan White HIV/AIDS program, as well as private coverage through an employer or in the individual market. Medicaid, the nation's principal safety-net health insurance program for low-income Americans, is estimated to cover the largest share of people with HIV. Fewer are covered by Medicare, the federal health…

  • Brenda Christiansen

    Other Post

    Brenda Christiansen, age 52, was diagnosed with breast cancer about a year ago. When she first noticed a worrisome lump, she was in the three-month waiting period for the health insurance offered through the nursing job she had recently taken. Within days of qualifying for this coverage, she was laid off. Uninsured and facing this diagnosis, Brenda was eligible to enroll in Utah Medicaid’s Breast and Cervical Cancer Prevention and Treatment Program. This Medicaid program…

  • Claire Smith

    Other Post

    Claire Smith, now 5 years old, was born with a rare genetic syndrome whose symptoms include multiple, severe physical, developmental, and intellectual disabilities. Claire’s family has private health insurance, but because of its bureaucratic barriers, her parents have had to struggle to obtain the care Claire needs. About a year ago, Claire’s parents learned that Claire could qualify for D.C. Medicaid’s “Katie Beckett” program. This program enables families like the Smiths, whose child with disabilities…

  • Fewer Want To Expand Medicaid After Hearing Their State Could Spend More

    Feature

    Fewer Want To Expand Medicaid After Hearing Their State Could Spend More Download Source Kaiser Family Foundation/Robert Wood Johnson Foundation/Harvard School of Public Health, The Public’s Health Care Agenda for the 113th Congress (conducted January 3-9, 2013)

  • Demographic Characteristics of Women with Medicaid

    Feature

    Demographic Characteristics of Women with Medicaid Download Source Kaiser Family Foundation analysis of Urban Institute estimates based on March 2012 Current Population Survey, Census Bureau

  • Children’s Eligibility for Medicaid/CHIP by Income, January 2013

    Feature

    Children’s Eligibility for Medicaid/CHIP by Income, January 2013 Download Source Based on the results of a national survey conducted by the Kaiser Commission on Medicaid and the Uninsured and the Georgetown University Center for Children and Families, 2013  

  • Comprehensive Medicaid Managed Care Models

    Feature

    Comprehensive Medicaid Managed Care Models in the States 2014 Download Source SOURCE: KCMU survey of Medicaid officials in 50 states and DC conducted by Health Management Associates, October 2014.