A 7.5% increase in Medicaid funding in the $229 billion state budget for nonprofit nursing homes won't go far enough, advocates warned this week.

Nursing homes, hospitals and assisted living facilities in the state are set to receive the increase in the budget after Gov. Kathy Hochul had backed a more modest 5% hike. But Leading Age New York, an organization that represents non-profit nursing homes in the state, called the agreed-to increase still too paltry given their needs.

"Unfortunately, New York’s nursing homes will continue to struggle to recruit and retain the robust workforce that is needed, which will continue to impact the availability of care for older adults who need long-term services, as well as people seeking hospital services," said Jim Clyne, the group's president.

Nursing homes, hospitals and labor unions this year had sought a 20% increase in the Medicaid reimbursement rate, pointing to the reverberations from the COVID-19 pandemic and the ongoing struggles for staff as well as cost pressures created by inflation.

Nursing homes have seen their costs increase by 42% since 2007 due to inflation.

"The majority of residents residing in nursing homes depend on Medicaid to pay for their care, making it the main payer and source of revenue for these long-term care facilities," Clyne said. "With inadequate and outdated reimbursement for the care being provided, it has become impossible for homes to compete for the staff they need, particularly amidst the health care workforce crisis."