New York’s state budget is late. That’s not unusual.
What is unusual —and unacceptable— is what’s being left unresolved.
Across the state, nursing homes are being asked to deliver high-quality care in a system that is fundamentally out of date. Medicaid reimbursement rates, which fund the majority of long-term care, are still based on costs from 2007.
Not adjusted for inflation. Not aligned with today’s labor market. Not reflective of the real cost of care in 2026.
That is not a technical oversight. It is a structural failure.
Over nearly two decades, every major cost driver has increased—wages, benefits, utilities, insurance, food, compliance requirements. At the same time, expectations for care have risen. Facilities are required to meet higher clinical standards, maintain more robust staffing levels, and navigate increasingly complex resident needs.
But the funding formula hasn’t kept pace with any of it.
The result is predictable. Providers are being squeezed. Workers are stretched thin. And residents—our most vulnerable New Yorkers—are caught in the middle.
This is not theoretical. It’s operational.
Every day, nursing home administrators make impossible decisions: whether they can afford to hire another nurse, retain experienced staff, invest in updated equipment, or simply keep beds open. Many facilities operate at a loss, forced to absorb rising costs without matching revenue.
This is not a sustainable model. It is a slow erosion of a critical part of New York’s healthcare system.
And we are already seeing the consequences.
Facilities have closed. Others have reduced capacity. Workforce shortages have intensified as providers struggle to compete in a labor market where hospitals and other healthcare settings can offer higher wages. The remaining system is under growing strain, even as demand for long-term care continues to rise with an aging population.
Yet the expectation from the state remains unchanged: deliver more, with less, and somehow make it work.
That is not a strategy. It is a policy choice.
New York cannot claim to prioritize nursing home resident care while funding it based on a 20-year-old cost structure. It cannot impose modern standards while relying on outdated assumptions about what care actually costs. And it cannot expect stability in a system asked to operate indefinitely in the red.
At some point, the gap becomes too large to bridge.
We are approaching that point now.
The path forward is not complicated. Albany does not need a new framework or a years-long study. The state already understands the problem. Providers have been clear. The data is clear. The consequences are visible in communities across New York.
What is needed is action.
Specifically: update Medicaid reimbursement rates to reflect the actual, current cost of delivering care. Not partially. Not symbolically. Meaningfully.
That means recognizing the realities of today’s workforce, today’s regulatory environment, and today’s nursing home resident population. It means aligning funding with the standards the state itself requires. And it means stabilizing a system that millions of New Yorkers rely on—families making some of the hardest decisions of their lives, and seniors who deserve to age with dignity.
Every day the budget remains unresolved is another day this pressure builds. Another day facilities are forced to make tradeoffs that compromise long-term stability. Another day closer to additional closures, reduced access, and deeper strain on the workforce.
This is not an abstract budget line. It is the foundation of care for some of the most vulnerable people in our state.
New York has a choice.
It can continue to rely on outdated formulas and hope the system holds together. Or it can act—decisively, and now—to bring funding in line with reality.
This is fixable. The solution is clear. The only question is whether Albany is willing to act before more damage is done.
Stephen B. Hanse is the president and CEO of the New York State Health Facilities Association and the New York State Center for Assisted Living.
