Community Corner
New Jersey’s Seniors Can’t Afford More Medicaid Cuts
Quality care is on the line—lawmakers must reject Medicaid cuts and fully fund nursing homes.
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The aging of our population is no secret, but many don’t consider how the funding we invest today determines the future of care. Within five years, all baby boomers will be age 65 or older, and the population of people aged 80 and over in New Jersey is projected to grow by 44% in the next decade.
This demographic trend inevitably means that New Jersey’s nursing homes will be more important than ever in providing quality health care to our state’s most vulnerable residents.
At a time when we need to increase payments to our nursing homes so they can meet the increasing demand, we are instead hearing about potential Medicaid cuts. Proposed federal Medicaid cutswould have a terrible impact on nursing home residents throughout New Jersey. These cuts would mean reduced access to the quality care our most vulnerable seniors deserve, just when they need it most.
Increased Medicaid Payment Rates = Increased Quality
Increased Medicaid payment rates are critical to quality nursing home care. Approximately 75% of nursing home residents rely on Medicaid to pay for their long-term care. Unfortunately, data is very clear that Medicaid payment rates are already too low.
A June 2024 report titled “Assessing Medicaid Payment Rates and Costs of Caring for the Medicaid Population Residing in Nursing Homes” prepared for the US Department of Health and Human Services found that the average Medicaid rate is 82-83% of the average cost of caring for Medicaid residents. Additionally, a March 2024 report to Congress prepared by the Medicare Payment Advisory Commission (MedPAC), an independent, non-partisan agency that advises the US Congress on Medicare issues, found that the average Medicaid rate is 86% of the average cost of caring for a Medicaid resident. Simply put, these reports clearly show Medicaid payments fall short of covering the true cost of care.
Low Medicaid rates have a direct impact on the quality of care that our nursing home residents receive. Data clearly shows that nursing homes with higher Medicaid payment rates have higher staffing levels and perform better on quality metrics than those with lower Medicaid payment rates. With rates already too low and a clear link between rates and quality of care, there can be no doubt that any cut in Medicaid rates to nursing homes will harm our residents.
The Reality of Underfunding in Nursing Homes
Here’s what underfunding of Medicaid rates for nursing home care means in real terms:
- Pay disparities: Because nursing home rates are too low, our workers earn less than their counterparts in other health care settings. For example, an RN in a nursing home earns $35–$45 per hour. A nurse with the same training and education in a hospital setting earns $45–$55 per hour. This type of pay gap makes it difficult for nursing homes to attract and retain qualified staff.
- Staffing shortages: With Medicaid payment rates lagging behind costs, nursing homes struggle to recruit and retain skilled nurses, CNAs, and therapists.
- Less access to care: Because of staffing shortages, most nursing homes cannot fill all their beds. This means that vulnerable seniors who need nursing home care end up lying in hospital beds, waiting for a nursing home bed to become available. This is bad for care, as hospitals do not provide the long-term care that these residents need, and is costly to the overall health care system, as each day in a hospital bed is far, far more expensive than if the person were in a nursing home.
- Aging infrastructure: Many nursing homes lack funding for upgrades like modern HVAC systems, improved infection control, and updated technology.
Potential cuts will result in fewer staff, resources, and beds for the state’s most vulnerable residents. The consequences of Medicaid cuts are clear. Fewer nurses. More staff burnout. Longer wait times. Less access to care for seniors.
What Needs to Happen to Protect New Jersey’s Seniors
This moment demands more than concern—it demands action. To protect New Jersey’s nursing home residents, we are calling on state and federal lawmakers to do the following:
- Fully fund Medicaid to ensure nursing homes receive the reimbursements necessary to cover actual care costs.
- Increase wages for Skilled Nursing Facility staff by adjusting Medicaid rates so facilities can compete with other health care providers for skilled professionals.
- Expand infrastructure improvement funding so nursing homes can upgrade facilities, improve infection control, and adopt new technology.
The data is clear—higher Medicaid rates lead to better quality of care. This isn’t just an operational concern—it’s a moral one. Quality care depends on resources, period. Fair Medicaid payment rates are not just about maintaining operations—they are about providing our most vulnerable seniors with the care that they deserve. We urge our state and federal leaders to fully fund Medicaid and invest in our growing senior population. Our seniors deserve no less!
Take action today! Urge your legislators to protect Medicaid funding for New Jersey’s nursing homes.
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