New York Nursing Home Advocates Rally in Albany — Demanding Half of a $1.5 Billion State Budget Fund

Albany, New York — Nursing home advocates, facility operators, and lawmakers gathered in Albany on Friday, calling on state officials to dramatically improve Medicaid funding for the industry — or risk a wave of closures that they warn could overwhelm the broader healthcare system.

The central demand: give nursing homes at least half of the $1.5 billion health care fund that Gov. Kathy Hochul earmarked for both hospitals and nursing homes in her upcoming state budget. The governor’s proposal didn’t specify how the money would be divided, and the industry isn’t waiting around to find out.

Advocates also want the state to raise what has long been a sore point — the Medicaid reimbursement rate that currently covers only about 75% of what it actually costs to care for a resident. That gap, they argue, has forced facilities to cut beds, reduce staffing, and in some cases shut their doors entirely.

“When nursing homes have a shortfall, it’s felt throughout New York’s healthcare networks,” said Stephen Hanse, president and CEO of the New York State Health Facilities Association. “With underfunded Medicaid and staffing mandates, you run into situations where nursing homes have to close beds or units because they don’t have sufficient staff.”

A Funding Gap That Cascades

Advocates at Friday’s rally made an argument that’s become a drumbeat in Albany: what happens in nursing homes doesn’t stay in nursing homes. When facilities are underfunded and understaffed, patients who can’t get a bed end up lingering in hospital emergency rooms, tying up acute care resources and driving costs across the system.

That domino effect is exactly why the nursing home sector is making a loud push now, with budget negotiations entering a critical stretch. Industry groups say that without a meaningful infusion of state funds, more facilities will face the same fate that New York’s nonprofit nursing homes have been confronting — closures that leave communities without options and families scrambling.

New York’s Medicaid program is already one of the most expensive in the country, and the state keeps a higher share of residents in nursing homes than the national average. That makes it a politically complicated environment to raise rates — Albany has historically resisted, citing the enormous scale of the program’s existing costs.

What Advocates Are Asking For

The specific asks coming out of Friday’s rally:

• A reimbursement rate increase that actually reflects the cost of care — not the current 75% floor that leaves facilities chronically short
• A guaranteed share of at least $750 million from the $1.5 billion healthcare fund in the state budget
• Protection from federal Medicaid cuts that are circulating in Washington and could compound any state-level shortfall

The push comes amid broader national anxiety over Medicaid funding. Several states are watching Washington closely after federal policy signals suggested cuts could be coming — and nursing homes, as heavy Medicaid dependents, would be among the first to feel it.

For operators in New York, the math is straightforward: a facility that depends on Medicaid for the majority of its revenue and is only being reimbursed for 75 cents of every dollar spent isn’t sustainable — not with today’s labor costs, energy costs, and care standards. The rally was a reminder that the industry isn’t going to let the budget season pass quietly.