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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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  • Post-Election Survey: The Public and the Health Care Agenda for the New Administration and Congress

    Poll Finding

    This Kaiser Family Foundation-Harvard School of Public Health survey, conducted immediately after the 2000 Presidential election, finds that health care issues ranked near the top of voters priorities for spending the surplus. Medicare ranked among the top three priorities, along with education and Social Security, and ahead of paying off the national debt and cutting taxes. Education ranked first. The survey also found that voters support patients rights legislation and some action to help the…

  • A Profile of Disability Among Families on AFDC – Report

    Report

    Profile Of Disability Among Families On AFDC Prepared by Pamela Loprest and Gregory Acs of the Urban Intitute Prepared for The Henry J. Kaiser Family Foundation August 1996 Executive Summary Introduction What is Disability? Disability Among Women Receiving AFDC Severity of Disability Type of Disability Health Care Service Use Summary Disability Among Children Receiving AFDC Type of Disability Health Care Service Use Summary Disability Among Families Receiving AFDC Disability and Work Conclusions Data Appendix Executive…

  • Primer on the Federal Budget, July 1997

    Report

    This report provides information on key budgetary facts and trends and highlights federal spending in health care programs. It includes an overview of federal revenues and spending in fiscal year 1995, an overview of the budget "window" from fiscal year1996 through fiscal year 2002, and the historical context for the budget debate, from fiscal 1973 through fiscal year 2002. Chartbook: Primer on the Federal Budget

  • Medicaid and Block Grant Financing Compared

    Issue Brief

      - Issue Brief State and federal budget pressures, rising health care costs, and new waiver initiatives have promoted debate over restructuring Medicaid at the federal and state level. Questions about how Medicaid is financed are central to this debate. This paper compares the current Medicaid financing system to a generic block grant financing system to illustrate the key differences in the structure and incentives of these alternative approaches. Issue Brief (.pdf)  

  • Employment-Based Health Insurance Coverage and its Decline:-2134

    Report

    Employment-Based Health Insurance Coverage and its Decline:The Growing Plight of Low-Wage Workers This background paper examines the increase in uninsured workers and the growing disparity in health insurance coverage between low- and high-wage workers. While a larger proportion of higher wage workers had health coverage in 1996 than a decade before, coverage deteriorated for low-wage and less-educated workers, especially young men. The paper explores many explanations for this widening disparity. The primary cause is that…

  • Medicare Prescription Drug Coverage: Facts, Options, and Implications

    Event Date:
    Event

    Testimony by Patricia Neuman, Sc.D., vice president and director of the Foundation's Medicare Policy Project, for the House Committee on Energy and Commerce, Subcommittee on Health, hearing on Creating a Medicare Prescription Drug Benefit: begins with a brief review of existing sources of prescription drug coverage for the Medicare population and a discussion of how the lack of coverage affects people on Medicare. It then reviews broad approaches to improving prescription drug coverage, considers the…

  • Medicare’s Disabled Beneficiaries: The Forgotten Population in the Debate Over Drug Benefits

    Report

    About 5 million Americans under age 65 qualify for Medicare coverage because they are totally and permanently disabled. They are more likely than the elderly to live in poverty, to be in poor health, and to experience difficulties living independently and performing basic daily tasks. A new study from The Commonwealth Fund and the Henry J. Kaiser Family Foundation, reports that the disabled have few options other than Medicaid for obtaining prescription coverage. In ,…

  • Kaiser Health Poll Report – October 2002

    Poll Finding

    A broad and informative bimonthly report, the new Kaiser Health Poll Report provides key tracking information, including historical trends and in-depth analysis of public opinion about hot health care topics. The current Featured Topic contains additional trends in public knowledge and attention to news about seniors and prescription drugs, as well as public opinion about who should be covered by a Medicare prescription drug benefit and what constitutes a good plan. Report Topline & Methodology

  • Transitional Medical Assistance (TMA): Medicaid Issue Update

    Fact Sheet

    This fact sheet presents the key questions and answers regarding transitional medical assistance as a part of the Medicaid program and its relationship to Temporary Assistance to Needy Families (TANF), the welfare program. Fact Sheet