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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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  • Trends in CHIP Expenditures: State-by-State Data

    Issue Brief

    A new brief reviews the latest data available on states' use of CHIP funds and explores the effect of a pending dip in CHIP funding on states' ability to provide health care coverage to uninsured, low-income children. ISSUE BRIEF Download

  • CHIP Program Enrollment: December 2000

    Report

    A new report reveals that CHIP provided coverage for 2.7 million low-income children in December 2000, a 48% increase from December 1999. The report also shows that enrollment in CHIP has consistently increased by roughly 900,000 children per year in its first three years of operation. REPORT Download

  • Medicaid Support for Family Planning in the Managed Care Era

    Report

    As the largest source of public funding for contraceptive care in the United States, Medicaid plays a crucial role in financing family planning services and supplies for millions of low-income women across the nation. In the past 15 years, managed care has become the primary way of delivering care to children and adults on Medicaid, a development which has had significant implications for how family planning services are financed, organized and delivered under Medicaid. This…

  • How Are Safety Net Hospitals Responding to Health Care Financing Changes?

    Report

    A new background report sums up how multiple trends have led to a situation where safety net hospitals are feeling more financial pressure and are challenged to subsidize the unprofitable care of theuninsured. Background Paper For a more extensive discussion read our larger report from the same study.

  • First Glance at the Children’s Health Initiative in Santa Clara County, California

    Report

    A new background report examines Santa Clara County in California in its effort to provide health insurance coverage (Children's Health Initiative or CHI) to all children living in the county. As one of the first localities to attempt such an initiative, its experiences can highlight important lessons and potential best practices for policymakers at the county, state, and national level considering coverage expansions for children. Also see Lessons from the Field: Increasing Enrollment in Children's…

  • Women and Medicare:  Making the Connection

    Other Post

    Women and Medicare: Making the Connection This briefing examines Medicare s role in meeting older women's health needs, the gaps in Medicare's benefits package for women, and the emerging debate over prescription drug coverage and Medicare reform.

  • Key Facts: Women and Medicare

    Report

    Medicare is a critical source of health insurance coverage for virtually all older women in the U.S. and for many younger women who have permanent disabilities. Today, 22 million women one in five adult women rely on Medicare for basic health insurance protection. In fact, women comprise 57% of the Medicare population. Medicare helps to make health care more affordable for older women at a time in their lives when they are most likely to…