Senator Nelson: $300 million emergency nursing home aid will provide $1.1 million for every nursing home in Minnesota
In the final days of the 2023 session, Senator Carla Nelson (R-Rochester) and Senate Republicans brokered a deal to secure an additional $300 million in emergency funding to address Minnesota’s dire nursing home crisis. The agreement will include direct grants, wage increases, and a workforce incentive fund that adds up to about $1.1 million for every nursing home in the state. These new funds are in addition to the $100 million in loans available in the Human Services bill passed last week.
“Nursing homes and long-term care facilities are facing a dire crisis, and have been for years,” Senator Nelson said. “Last year, my Senate colleagues and I supported $1 billion to support nursing homes, but unfortunately we could not get agreement from the House and Gov. Walz. This year we tried again but were met with resistance until yesterday. I am happy to report that the Democrat majorities finally agreed to some badly-needed funding to keep nursing homes afloat. We still have more to do, but this is an amazing start.”
Nursing Facility Grants totaling $173.5 million will be split into two payments in August 2023 and August 2024. Each nursing home will receive at least $225,000, plus additional funds based on active beds for every nursing home in the state, an average 50-bed facility could see $465,000 in grant funding. The grants can be used for various fiscal management strategies to improve the financial health of nursing homes. Unlike loans in the Human Service budget, these grants will not need to be repaid, making their impact much more meaningful for nursing homes.
Staffing concerns continue to be a major challenge for nursing homes. $51.5 million in state money in addition to federal funds will enable a temporary $12.32 daily rate add-on for 18 months. Nursing home administrators say that this could translate into a pay raise of about $1 per hour for nursing home staff. The remaining funds from the $300 million are put into a Workforce Incentive Fund (WIF) that facilities can use for hiring and retention bonuses, employee-owned benefits, and employee contributions to a 410k, along with professional development, childcare, meals, transportation, and housing needs of employees. The WIF caps out at $3000 per worker, per year and is available until funds are spent or July 2029.
According to Long-Term Care Imperative, a collaboration of aging services providers, 15% of nursing homes statewide have completely exhausted their financial reserves and 10% are considering closing. In Greater Minnesota, 17% have no financial reserve and 12% are considering closures. With about 350 nursing homes in the state, that puts 60 nursing homes without reserves, and 41 considering closure.