Nursing Home Beds Are Becoming More Scarce

# What's happening Nursing home capacity is contracting in many places. Some facilities have stopped admitting patients, others have closed floors, and many report fewer usable operating beds than their licensed totals. That is creating waiting lists for people who need long-term nursing care.

# Concrete examples

# Why capacity is shrinking

• Medicaid reimbursement is a central financial pressure. Medicaid is the primary payer for long-term nursing care but often pays less than the daily cost of providing care. Low reimbursement forces facilities to operate at a loss or reduce capacity.
• Staffing shortages increase closures and reduce operating beds. Nursing home aides face stressful, low-paid jobs with high turnover. Federal data compiled by PHI shows aides' median hourly pay was $20.67 last year and about 40% relied on public assistance.
• Facilities shift toward higher-paying short stays covered by Medicare when possible. Medicare rates are higher than Medicaid, so some homes prioritize short-term rehabilitation patients over long-term residents.

# National trends and numbers In 2015, the Centers for Medicare & Medicaid Services certified 15,648 nursing facilities. A decade later that count had fallen by more than 900. A study published in JAMA Internal Medicine found a roughly 5% decrease in national nursing home capacity between 2019 and 2024. Occupancy rates have returned to about 80% after pandemic drops, but licensed-bed occupancy can hide a lower number of operating beds that are actually available for admissions.

# Quality and demand dynamics Some families avoid nursing homes because of concerns about quality. Medicare inspections found at least one serious quality violation in 27% of homes in a recent KFF analysis. At the same time, alternatives have reduced demand: about a million older adults live in assisted living, and Medicaid "rebalancing" has shifted more spending to home- and community-based services compared with decades ago.

# What this means for people seeking care Expect longer waits in some areas and reduced choice, especially where closures concentrate. Even if a facility is licensed for many beds, staffing and finances may make fewer beds actually available. Families looking for long-term care should confirm a facility's current operating capacity, admission policies, and payer mix (Medicaid versus Medicare) rather than relying on licensed-bed numbers.

# Short-term implications and practical steps

• Ask a facility how many operating beds are available now and whether it is limiting admissions.
• Verify how the facility handles Medicaid patients and whether there are waiting lists for long-term placements.
• Consider home- and community-based services and assisted living as alternatives, but assess whether they meet expected clinical needs and payment options.

# Bottom line Nursing home bed availability is declining in many regions due to financial and workforce pressures even as the population ages. Alternatives reduce some demand, but they do not erase the access problems for people who need institutional long-term care.