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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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  • Enabling Services: A Profile of Medicaid Managed Care Organizations

    Report

    The report provides basic statistics on Medicaid managed care organizations providing enabling services - transportation, translation, education, and case management. The report also identifies the extent of variation across plans. REPORT Download

  • Access to Care for S-CHIP Children with Special Health Needs

    Issue Brief

    A study of California, Connecticut, Maryland, Missouri, and Utah CHIP programs show that the states have features in place for special needs children, but problems of provider availability and service authorization did sometimes occur. This is the first in a series of reports on implementation issues and challenges in the first year of CHIP. ISSUE BRIEF Download

  • Immigrants’ Access to Health Care After Welfare Reform:  Findings from Focus Groups in Four Cities-1608

    Report

    Immigrants' Access to Health Care After Welfare Reform: Findings from Focus Groups in Four Cities A new analysis of focus groups in Los Angeles, Miami, New York, and San Antonio reveal immigrants' knowledge of and attitudes toward public programs such as Medicaid and CHIP. Themes explored include current health coverage, participation in programs, barriers to enrollment, and access to care. Report

  • Medicaid and Prescription Drugs: An Overview

    Report

    This background paper discusses the coverage of prescription drugs through the Medicaid program. Some of the issues addressed include who is eligible to receive drugs, how drug coverage is paid for, and how much money states spend on drugs. Background Paper

  • Putting Express Lane Eligibility into Practice

    Report

    A new report details how the practice of express lane eligibility, or utilizing information from other public benefit programs, can quicken the enrollment of low-income children into the Medicaid and CHIP programs. REPORT Download

  • Comparison of Medi-Cal and Healthy Families Programs for Children in California

    Report

    A new side-by-side examination of California's Medicaid program (Medi-Cal) and CHIP program (Healthy Families) shows how these two low-income health coverage programs differ in structure, eligibility, enrollment process, service delivery and scope. This California case study helps to illustrate differences between Medicaid and CHIP. SIDE-BY-SIDE Download

  • Marketing Medicaid and CHIP: A Study of State Advertising Campaigns

    Report

    A Survey and Analysis of What States Are Doing Based on interviews of state officials and analysis of tv, radio, and print ads from the states, this report is the first nationwide analysis of states' advertising campaigns to enroll eligible kids into health coverage programs. Included is information about how states developed their campaigns and the common messages states are trying to convey about their coverage programs. Report (.pdf)