Gov. Walz wants to cut some funding for nursing homes in supplemental budget but faces pushback

One of the most controversial in that budget is a cut in funding for nursing homes.

Walz, speaking to WCCO's Morning News with Vineeta Sawkar, said Minnesota nursing homes statewide are reimbursed at a rate higher than almost any other state.

"Nursing homes are, they are being paid quite a bit," Walz said. "It's an industry that is challenging because of their workforce needs, and some of the things they need to do. But this is not about cutting."

Walz adds it's this is something that creates sustainability within the program. But it's a proposal that House Speaker Lisa Demuth (R) says is a non-starter for GOP lawmakers.

"You've heard us talk for years, the challenges that communities have when it comes to nursing homes," she said Wednesday on the WCCO Morning News. "And trying to make ends meet there. We don't wanna see any cuts at all to nursing homes."

It's a bonding year at the capitol this year, not a budget year, but Walz says there are still structural imbalances in the state's budget. Most states increased rates of reimbursement in 2024–2025 to help address staffing shortages.

"These things that are decades in the making, that we were structurally out of balance," Walz adds. "Last year, collectively, and I thank Leader Demuth for the work that she did working with us on this, but there's still some more work to be done."

Nursing home reimbursement rates vary significantly by state and are primarily driven by Medicaid, which covers nearly two-thirds of all residents.

A report from the Minnesota Legislature in 2023 found that the estimated average Minnesota Medicaid rate of $373.32 is greater than all but one of the states in the comparison group. Only North Dakota had a higher daily average.

That study also noted that Minnesota's Medicaid rates are still in line with comparable state averages, and in some cases, offer more comprehensive coverage.