HARRISBURG, PA — State leaders, residents, and LeadingAge PA gathered in the Main Capitol Rotunda on Tuesday to urge lawmakers to establish consistent and sustainable Medicaid reimbursement in the 2025–26 state budget. The group emphasized the need for $139 million in funding for nursing homes and an additional $20–22 million for LIFE (Living Independence for the Elderly) providers, highlighting mounting financial and workforce challenges facing these care sectors.
“At a time when we should be expanding services, aging services providers are being forced to make difficult decisions, including limiting admissions, scaling back services, and even closing doors due to a persistent workforce shortage and an unpredictable funding system,” said LeadingAge PA President and CEO Garry Pezzano.
Rising Demand, Shrinking Capacity
Pennsylvania’s aging population continues to grow, with more than 2.4 million residents aged 65 and older and one in three expected to be over 60 by 2030. Yet, over the past several years, at least 30 nursing homes have closed statewide, and thousands of beds sit unused due to staff shortages. Approximately 70% of nursing home residents and the vast majority of LIFE participants rely on Medicaid for care, leaving providers struggling to bridge the gap between costs and reimbursements.
“Pennsylvania is home to a significant older population that continues to grow, which means we must invest in the programs, resources, and caregivers who give our seniors the ability to age in their community that’s best suited to their needs,” said House Majority Leader Matt Bradford. “My colleagues and I will continue to fight for these critical investments.”
Proposals to Close the Funding Gap
LeadingAge PA is calling for specific measures to stabilize funding, including a 0.90 Budget Adjustment Factor (BAF) for nursing homes, which would require a $139 million investment. Additionally, the organization proposes establishing a minimum reimbursement rate of 63% of the Amount That Would Otherwise be Paid (AWOP) for LIFE providers, requiring $20–22 million annually.
These adjustments aim to address stark disparities in reimbursement, with Medicaid funding reported to cover only 45–60% of actual care costs. Without adequate investments, a recent survey found that 53% of nursing homes have already limited admissions, while 20% have closed entire units.
“With a rapidly growing senior population and a caregiver workforce shortage, it is absolutely critical that we adequately fund senior programs and services in the upcoming state budget,” said Representative Maureen Madden, Chair of the House Aging & Older Adult Services Committee.
Supporting Independence Through LIFE
The LIFE program plays a vital role in helping seniors remain in their homes while receiving coordinated care, offering both independence for participants and efficient use of Medicaid funds. Despite its benefits, reimbursement rates for LIFE providers in Pennsylvania have steadily declined over the past 15 years.
“The LIFE program uses a coordinated approach to providing quality care while efficiently utilizing Medicaid funding,” said Representative Steven Mentzer. “Without a more sustainable reimbursement structure, providers may no longer be able to operate, forcing participants into more expensive care settings and raising costs for the state.”
Strengthening the Workforce
Addressing workforce shortages also emerged as a key issue during the event. Senator David Argall underscored the urgent need to support those working in long-term care, noting the impact on families statewide.
“Too many of our families, including mine, have faced the difficult decision of moving a beloved parent or grandparent into a long-term care center, yet the professionals who make sure they are cared for are facing increasing challenges because of workforce shortages,” Senator Argall said. “By encouraging more people to pursue this fulfilling career path, we’re ensuring quality care for the older members of our families.”
With Pennsylvania’s aging population at the forefront of budget discussions, advocates remain steadfast in their call for investments to ensure the quality of care and services for some of the state’s most vulnerable residents.
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