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Because of the impending midterm elections, Gov. Kathy Hochul has not missed an opportunity to condemn the Trump administration's federal healthcare policies, claiming they will strip health insurance from over one million New Yorkers, cost the state billions in funding, and spike prescription drug costs for 1.3 million seniors.
Cuts in federal healthcare spending have had an impact on state healthcare funding but Governor Hochul was wrong in describing as "cruel" the ending of the "temporary" Medicare Part D Premium Stabilization "Demonstration" Program introduced under the Biden administration.
She claims that ending this premium subsidy program will cause monthly prescription drug premiums to spike by up to 40% for 1.3 million New York seniors by 2027. A statement from CMS Administrator Mehmet Oz stated that the program was "an expensive market bailout that is no longer needed." Experts expect most seniors will see premium changes of less than $10.
She also decried the ending of the New York State (NYS) Essential Plan that caused one million New Yorkers to lose health insurance coverage. Those who qualified for the plan paid nothing per month with very low or no copays. It cost the Federal Government between $9.7 billion and $14.9 billion annually. The federal budget package prohibited using federal health care funds to cover certain “lawfully present” immigrants, such as asylum seekers and DACA recipients, who had been covered under the state’s expanded rules. New York decided to end the program which was surprising for a state government that thinks money grows on trees to do.
Although the governor took the opportunity to blame Trump and his administration for the nursing home crises in the state, she is partially correct in that recent federal spending cuts have worsened the financial strain on New York's healthcare system, particularly nursing homes. However, she did not acknowledge that much of the blame for the nursing home crises lies with Cuomo Administrations and now her own.
So while recent federal cuts caused an immediate shock in the healthcare industry, nursing home operators and advocates emphasize the underlying crisis that has been building for nearly two decades.
The New York State Department of Health reports there are approximately 599 nursing homes statewide, but experts point out that this number is insufficient, especially in rural areas, like Chautauqua County where facilities are sparse with four closing since 2019 putting pressure on the remaining facilities that often cannot accommodate displaced patients. The state has lost over 5,600 nursing home beds due to closures and decertification.
Christina Audi, executive director of Schuyler Ridge Nursing Home in Clifton Park in suburban Albany said her 120-bed facility is almost full every day. She and others at the rally blamed new state mandates, outdated funding models, and the inflated costs of staffing, medical supplies, and utilities.
The core of the problem is that New York's Medicaid reimbursement rates did not keep pace with actual care costs for roughly 15 to 18 years. Between 2007 and 2024, nursing home costs rose by 51%, while state Medicaid rates increased by just 12.8%. Facilities lose an average of $85 to $150 per day for every Medicaid patient they care for. Also, long-term care facilities now face a catastrophic shortage of nurses and aides, driven by low wages and lingering pandemic burnout. This has forced many facilities to downsize, place a cap on admissions, or the use of expensive temporary staffing agencies.
One of the biggest challenges facing nursing homes is staffing shortages. Many facilities are struggling to retain workers as hospitals and other industries offer better wages and benefits. According to Stephen Hanse, president and CEO of the New York State Health Facilities Association (NYSHFA). "Nursing homes need to be able to compete in the labor market against big-box stores. Right now, they're paying $20 or $21 an hour with health benefits."
Advocates for the industry state that among the things the state must do is to update reimbursement rates while basing Medicaid rates on current economic realities rather than outdated historical costs in order to close the massive multi-million dollar per-day operating deficit. It also needs to fully restore capital reimbursement so non-profit and community facilities can modernize their aging infrastructures.
Further, the state needs to fund competitive pay and good benefits to help nursing homes compete with hospitals and retail sectors for aides and nurses. The state should also create state-sponsored tuition assistance programs for nursing assistants.
Experts also say there is a need to ensure that facilities maximize funds spent directly on patient care and staffing rather than excessive executive compensation or related-party real estate profits. They also recommend that the Department of Health track facility closures and monitor troubled chains to prevent sudden facility abandonments that create local care deserts.
New York is not alone in facing a nursing home crisis. It is a nationwide issue, with nearly 90% of facilities across the United States operating below expected staffing levels. While New York faces severe financial and regulatory strains, many other states are also experiencing critical shortages, mass facility closures, and drops in care quality.
Thomas Kirkpatrick Sr. is a Silver Creek resident. Send comments to editorial@observertoday.com.