Karen Bugocki knows the importance of nursing home funding.
Her 76-year-old brother has Parkinson’s disease and has been living at the Daughters of Sarah Nursing Center in Albany for the last two years. She visits him often, and says the staff is so attentive that they started serving him more salmon when he needed to increase the amount of iron in his diet.
“It's a wonderful thing to see, wonderful thing to witness — to see the love and dedication of these hardworking people, and it means everything to our family,” Bugocki said.
Last week she joined nursing home operators at a rally to say that the level of care her brother is receiving is at risk — and in many cases cannot be offered due to financial strain. The operators are urging the state to increase state funding offered through Medicaid reimbursements for nursing home care.
The reimbursement rates haven’t changed for nearly two decades. Rather than adjust the rates, Gov. Kathy Hochul has proposed a funding increase of $1.5 billion — split between nursing homes and hospitals.
Nursing homes want at least half. Ten facilities in the state have shuttered in the last two years, removing more than 1,000 beds from the system. St. Peter’s Health Partners announced this month it was closing a nursing home in Albany because it didn’t have the money for needed maintenance and renovations. Its 96 residents will be relocated.
“Long-term care providers have been operating on negative margins for years,” said Sebrina Barrett, CEO of LeadingAge NY, which advocates for nonprofit nursing homes.
A lot of that is due to stagnant Medicaid funding. The state-federal program pays the bills for 75% of nursing home residents, according to the New York State Health Facilities Association. It’s a big reason why 70% of nursing homes reported financial losses in 2022, that trade group reported.
Hospitals are also reliant on Medicaid, which provides health coverage for low-income and disabled people, but less so than nursing homes. Around 30% of in-patient hospital stays in New York are covered by Medicaid, according to the nonpartisan policy group KFF. The Greater New York Hospital Association, a trade group, reported that half the state’s hospitals lost money in 2025. Some rural facilities reduced services, and a hospital chain in the North Country recently declared bankruptcy.
The association’s president, Kenneth Raske, said the federal tax and spending bill Republicans passed last year will cut $8 billion from hospital coffers. Several hundred thousand New Yorkers are expected to lose government-backed health insurance because of that law, which will take more money out of the system.
“When they lose insurance doesn't mean they don't get sick. And when they do get sick, we still take care of them,” he said. “That becomes uncompensated care.”
Hochul, a Democrat, rallied last week with Raske and unionized health care workers. She blasted the federal changes and said she's committed to protecting health care jobs.
“That is a fight I'll join all of you with any day, anytime, anywhere,” Hochul said. “I have confidence that this budget will deliver the relief you need, that healthcare workers need, that our patients need.”
Nursing home operators hope they won’t be forgotten by the state government. Because many seniors rely on Medicaid, long-term care providers are especially dependent on the program.
Jaimy Farnan, administrator of the Kingsway Arms nursing home in Schenectady, said Medicaid reimburses about half of the actual cost of keeping someone at his 160-bed facility. Since more than half of his residents rely on Medicaid to pay the bills, he said, he struggles to recruit staff at the wages he’s able to pay.
“My worry for the state is, as these facilities who are dependent on Medicaid continue to close, access to this level of service for folks is going to dwindle,” he said. If nursing homes can’t accept or hold patients, they will either remain in hospitals or be discharged to homes when they might need a higher level of care, he said.
New York State Medicaid Director Amir Bassiri testified at a legislative budget hearing that the department is in the process of changing its reimbursement rates. He and State Health Commissioner James McDonald invited lawmakers to work with Hochul to divvy up the $1.5 billion pot of extra funding between hospitals and nursing homes.
Assemblymember Carrie Woerner, a Saratoga County Democrat, said both are important to the system because hospitals often discharge patients to nursing homes.
“Making sure that there's a path when somebody is ready to be discharged into a nursing home, means that the hospital isn't going to experience the uncompensated care,” she said. “And uncompensated care, by the way, just ricochets back on all of us.”
