Lawmakers Press for $750M Nursing Home Boost as Medicaid Funding Fight Intensifies in Albany

Albany, NY — A coalition of New York lawmakers is urging state leaders to steer $750 million in Medicaid funding toward nursing homes as budget negotiations intensify in the Capitol.

Earlier this week, legislators gathered at Jewish Home to make their case. While the state has earmarked $1.5 billion in Medicaid reimbursement increases for hospitals and nursing homes combined, officials have not yet determined how that money will be split.

Lawmakers argue that nursing homes deserve half of the total allocation, pointing to mounting financial pressures across the sector.

Rising Costs, Lagging Reimbursement

According to state data cited by advocates, nearly 70% of nursing home residents rely on Medicaid. Yet reimbursement rates have failed to keep pace with the rising cost of care.

Between 2007 and 2024, the cost of operating nursing homes climbed 51%. During that same period, Medicaid reimbursement rates increased by just 12.8%. The disparity, providers say, has left facilities struggling to stay afloat.

Michael King, president and CEO of Jewish Home, said the funding gap has already forced difficult decisions statewide.

Over the past five years, 14 nursing homes have closed in New York, eliminating more than 2,000 beds, according to King. Other facilities have taken beds offline because they lack the staffing required to safely admit new residents.

Even when beds are physically available, they often can’t be filled without sufficient staff.

Hospitals Feeling the Ripple Effects

The strain is not limited to long-term care providers.

Hospitals across the state are facing overcrowded emergency departments, in part because patients who are ready to be discharged cannot be transferred to nursing homes.

“Primarily because of the lack of available nursing home beds,” King said, describing one of the main drivers behind hospital backups.

Lawmakers say directing $750 million to nursing homes would not fully close the reimbursement gap. Still, they contend it would provide meaningful relief to both nursing homes and hospitals by stabilizing capacity.

Budget Deadline Approaches

The debate comes as Albany enters the final stretch of budget negotiations. While the $1.5 billion in Medicaid reimbursement is guaranteed for this fiscal year, the breakdown between hospitals and nursing homes remains unresolved.

State lawmakers are expected to finalize and vote on the budget by April 1.