2026-27 STATE BUDGET UPDATE
Following an almost two-month delay, the Governor and the Legislature released the agreed upon Health and Mental Health (HMH) Article VII State Budget bill late yesterday evening. This bill is scheduled to be voted on today. This legislation includes critical investments for skilled nursing facilities throughout New York.
Specifically, the FY 2026-27 HMH State Budget includes the following investments for skilled nursing facilities:
Medicaid Rate Increase
The State Budget increases Medicaid reimbursement for skilled nursing facilities by $480,000,000, on a recurring basis, beginning April 1, 2026.
One-half of this funding will be allocated on a per diem basis, while the remaining one-half will be allocated on an across-the-board percentage basis.
Capital Cut Restoration
The State Budget includes the restoration of the previously enacted 10% capital cut. This is a $57 million restoration to the capital component of the Medicaid rate.
New MCO Tax
The State Budget establishes a new MCO tax that complies with federal requirements effective January 1, 2027. Under this new broad based and uniform MCO tax, health plans will be required to pay a rate of 0.35% of total premium revenue each calendar year. This new MCO tax has yet to be allocated to any specific provider type on the healthcare continuum and is expected to generate up to $200 million in its first year.
MCO Tax
In addition to these investments, the $385,000,000 MCO tax funds allocated in the FY 2025-26 State Budget for disbursement to skilled nursing facilities in FY 2026-27 is scheduled to be disbursed.
Given the foregoing, the net FY 2026-27 investment in skilled nursing facilities includes over $920,000,000 in funding – an increase of over 13%.
These provisions were the top priorities of NYSHFA’s State Budget advocacy and will help provide critical investments for New York’s skilled nursing facilities and the residents we serve.
NYSHFA will continue to provide updates regarding the final FY 2026-27 State Budget.
NYSHFA | NYSCAL CONTACTS:
Stephen B. Hanse, Esq.
President & CEO
518-462-4800 x.11
Carl Pucci
Financial Consultant
518-462-4800 x.36
Kristin DeVries, MA, MPP
Director of Assisted Living & Strategic Communications
518-462-4800 x.14
