DataPoint: 5 Key Facts About Nursing Facilities and Medicaid

(June 10, 2025) A recent brief from the Kaiser Family Foundation (KFF) revealed that Medicaid is the primary payer for 63 percent of the 1.2 million residents who reside in a skilled nursing facility (SNF) in the U.S. (756,000). Of the $147 billion the U.S. spent on institutional long-term care (LTC) in 2023, Medicaid accounted for 44 percent of spending ($64 billion) as well as 69 percent of total home care spending ($214 billion). Twenty-two states (including Washington, DC) levy provider taxes greater than 5.5 percent to help finance the state share of Medicaid spending, with an additional 15 states levying provider taxes less than 5.5 percent but greater than 3.5 percent. This nuanced Medicaid utilization data was published by KFF on May 28^th in a brief titled “5 Key Facts About Nursing Facilities and Medicaid,” which aims to contextualize the implications the reconciliation bill will have on the 15,000 federally certified nursing facilities across the U.S. and the 1.2 million residents who rely on skilled nursing. Having now been passed by the House of Representatives, the reconciliation bill is forcing states to contemplate how they will compensate for federal cuts to Medicaid spending, which could include lowering Medicaid reimbursement rates, which could result in reductions to staffing that are tied to lower nursing facility quality and poorer outcomes. A separate Medicaid provision could tighten eligibility by reducing the home equity limit over time, making it more difficult for people to qualify for skilled nursing and other LTC services. Substantial cuts to Medicaid could undermine efforts to increase nursing facility staffing levels, with several states having already implemented strategies in the past to increase their direct care workforce. A couple of these strategies include rate increases (45 states), increasing the direct care worker (DCW) minimum wage in nursing facilities (8 states), increasing DCW benefits such as sick leave and training (5 states), and requiring nursing facilities to pass through reimbursement increases to DCWs (6 states). To read the full brief from KFF, click here.

Contact: Eric Dumas, edumas@leadingageny.org, 518-867-8851