With Pennsylvania’s senior population rapidly growing and the state facing a critical workforce shortage in long-term care, lawmakers, aging services advocates, and seniors gathered at the Capitol Tuesday to call for urgent action in the 2025–26 state budget to stabilize Medicaid reimbursements for nursing homes and LIFE (Living Independence for the Elderly) providers.

Pennsylvania is home to over 2.4 million residents aged 65 and older, and by 2030, one in three Pennsylvanians will be over 60.

Despite this, at least 30 nursing homes have closed in recent years, and thousands of beds remain unused due to staffing and funding challenges.

Around 70% of nursing home residents and nearly all LIFE program participants depend on Medicaid for their care.

Aging services leaders, including LeadingAge PA, are urging lawmakers to address a significant gap between Medicaid reimbursements and the actual cost of care.

Nursing home providers report Medicaid covers only 45–60% of their costs, forcing many to limit admissions, delay improvements, or close wings and units.

LeadingAge PA is advocating for:

   •A $139 million investment to set a 0.90 floor for the Budget Adjustment Factor for nursing homes.

   •$20–22 million increase for LIFE providers, raising reimbursement rates to at least 63% of what would otherwise be paid.

Governor Josh Shapiro’s proposed 2025–26 budget includes several new investments for older Pennsylvanians:

   •$21 million to increase wages and benefits for direct care workers serving seniors and adults with disabilities through Community HealthChoices.

   •$20 million in new funding for Area Agencies on Aging (AAAs) through the PENNCARE appropriation, supporting community-based services for older adults.

   •Increases in Medicaid managed care funding for physical and behavioral health services, as well as Community HealthChoices, with over $1.7 billion in additional state General Funds        proposed for these programs.

Despite these proposed increases, advocates argue that more is needed.

The Pennsylvania Association of Area Agencies on Aging (P4A), for example, is calling for a $105 million increase to the PENNCARE line item to fully meet the needs of older adults in their communities.

As budget negotiations continue, the coalition of lawmakers, providers, and seniors is urging the General Assembly to prioritize sustainable Medicaid reimbursements and investments in the direct care workforce to ensure seniors can age with dignity and access the care they need.