Albany, New York — With the state’s $260 billion budget already weeks overdue, New York’s nursing homes are making a desperate last push for their share of a multibillion-dollar Medicaid pot — and the hospital lobby isn’t making it easy.
At stake is anywhere from $1.5 billion to $2.4 billion in supplemental Medicaid funds that Gov. Kathy Hochul and state lawmakers are negotiating to offset the federal health care cuts pushed through by President Trump. Both sides agree the money is needed. The fight is over who gets it.
Hospitals say they deserve two-thirds of the pot — roughly mirroring their share of total Medicaid spending — and argue the federal cuts hit them hardest. Nursing homes are pushing for a 50-50 split, pointing to a workforce crisis that predates the current political storm.
The Staffing Math Doesn’t Lie
New York nursing homes have shed roughly 17,000 workers since the pandemic, dropping from about 121,000 employees to 104,000, according to data from the Empire Center, a fiscally conservative think tank. Hospitals, meanwhile, grew from around 390,000 workers to 412,000 over the same period — adding 22,000 jobs.
“They are in a shrinking mode while hospitals are in a growing mode,” said William Hammond, an Empire Center fellow. The contrast isn’t just statistical — it’s operational. Long Island nursing homes alone need to hire the equivalent of 600 full-time nurses, LPNs, and certified nurse aides just to meet minimum staffing requirements. Because roughly 30% of those workers are part-time, that translates to about 850 actual positions still unfilled.
“Staffing is very hard,” said Sebrina Barrett, CEO of LeadingAge New York, which represents nonprofit facilities. “Fifty percent of Long Island nonprofit nursing homes are operating at a deficit, so it is hard to go out and compete for the staff they need.”
A 10-Figure Battle With No Clear Winner
Hochul proposed a $1.5 billion Medicaid earmark; the Assembly has endorsed $2.4 billion. The Senate broadly supports health care spending increases but through different budget mechanisms. None of the proposals specify how the money would be divided between hospitals and nursing homes.
The hospital lobby has been blunt. “This is very simple,” said Kenneth Raske, CEO of the Greater New York Hospital Association. “Ultimately, there has to be a distribution based on the impact of [Trump’s budget].” Raske claims hospitals face about $8 billion in federal aid losses over three years — a figure, he argues, doesn’t apply to nursing homes in the same way.
Nursing home operators dispute that framing. Stuart Almer, CEO of Gurwin Healthcare System in Commack, said state Medicaid reimbursement rates haven’t kept up with costs for years — a problem that predates any federal action. “We feel justified asking for half of those Medicaid monies,” he said. “Hospitals are in a hiring mode… we know we can never compete with hospitals on salaries.”
It’s a pattern playing out across the country. As industry reports have noted, Pennsylvania’s nursing homes have been closing beds and turning away hospital patients for similar reasons — a toxic combination of inadequate reimbursement, workforce losses, and a hospital sector that’s better positioned to compete for both staff and state dollars.
The Clock Is Running Out
New York’s budget was due April 1. It’s still not done. Negotiations continue, but sources say lawmakers want to approve at least the $1.5 billion Hochul proposed. What’s still unresolved is the split — and that decision could determine whether dozens more nursing homes slide into insolvency or manage to hold on.
For Long Island facilities running at a deficit, the margin for error is thin. “We’re in a high turnover business,” Almer said. State aid, he argued, isn’t a windfall — it’s a lifeline.
