Medicaid Pays Nursing Homes Less than Minimum Wage, AHCA Says

A new study released by the American Health Care Association (AHCA) finds that Medicaid programs in states across the country underfunded nursing facility care by $5.6 billion in 2010, paying on average $7.17 per hour per patient, less than the nation’s current minimum wage of $7.25 per hour. Medicaid funds 64% of the care provided in skilled nursing facilities nationally, AHCA said in a release.

“This report reveals a truth many would not believe—today’s nursing facilities are paid less than the minimum wage,” said Mark Parkinson, president and CEO of AHCA. “That must change if we ever hope to serve the needs of a Baby Boom generation that will only stress our care delivery system further.”

Compiled by the research group Eljay, the report identifies which states are most affected by the rising pressure on state Medicaid budgets, both in terms of highest aggregate Medicaid underfunding and highest per patient per day underfunding. States topping those lists are New York, Illinois, Massachusetts, Minnesota, New Jersey, and Wisconsin.

“There is a vast gap between the actual cost of providing quality eldercare and what the Medicaid program truly finances,” Parkinson continued.

The following highlights the states with the largest aggregate Medicaid underfunding and largest per patient per day underfunding:

Largest aggregate Medicaid underfunding

1. New York – $1,396,494,595

2. Illinois – $378,779,709

3. Massachusetts – $310,871,237

4. New Jersey – $304,430,314

5. California – $288,599,289

6. Pennsylvania – $277,609,403

7. Ohio – $248,513,290

8. Wisconsin – $181,237,562

9. Minnesota – $151,611,752

10. Missouri – $137,412,649

Largest Medicaid per patient day underfunding

1. New York – $47.95

2. New Hampshire – $31.25

3. Massachusetts – $31.22

4. New Jersey – $29.29

5. Washington – $28.18

6. Wisconsin – $26.54

7. Minnesota – $24.70

8. Wyoming – $23.67

9. Delaware – $22.86

10. Illinois – $21.95

Click here to read the full study in PDF format.

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