The best states to open a nursing home, judged by the Medicaid daily rate, are New Mexico, Colorado and Rhode Island. New Mexico ranks 1st of the 20 states compared, with a published rate of $826.00 a day, 192.3% above the national median of $282.59. Colorado ranks 2nd at $419.22 a day and Rhode Island 3rd at $381.06.
For a nursing home that expects to serve Medicaid residents, the daily rate is the core of that revenue. But it is still only one input. This guide ranks states on the published daily rate, and explains how each state pays: directly, through plans, or with directed payments. Licensing, approval for new beds, staffing, payer mix and local competition all need research of your own.
The table ranks the ten states that publish the highest Medicaid daily rate for a nursing home stay. We do not show a margin for nursing homes: a daily rate pays for 24-hour nursing, food, a building and administration, so no single wage comparison fits. The last column shows how far each rate sits above the national median.
| State | Daily rate | Rank | Above national median |
|---|---|---|---|
| New Mexico | $826.00 | 1 of 20 | 192.3% |
| Colorado | $419.22 | 2 of 20 | 48.3% |
| Rhode Island | $381.06 | 3 of 20 | 34.8% |
| Washington | $373.84 | 4 of 20 | 32.3% |
| Kentucky | $365.78 | 5 of 20 | 29.4% |
| Maryland | $351.63 | 6 of 20 | 24.4% |
| North Carolina | $326.33 | 7 of 20 | 15.5% |
| California | $324.03 | 8 of 20 | 14.7% |
| Nebraska | $321.16 | 9 of 20 | 13.6% |
| Mississippi | $285.90 | 10 of 20 | 1.2% |
Nursing home daily rates can be set facility by facility or adjusted for how much care residents need. The figures here are the daily rates states publish, and each state page shows the rate with the publication it comes from and its effective date.
New Mexico publishes a nursing home daily rate of $826.00. That ranks 1st of the 20 states compared and is 192.3% above the national median.
No other state comes close: Colorado, in 2nd place, publishes $419.22. On the Medicaid daily rate alone, New Mexico is the strongest state in the country for a nursing home by a wide margin.
In New Mexico, plans must pay at least the published rate, so the daily rate is a floor in plan contracts as well as the state's own payment. That combination of the top rate and a binding floor is unusual, and it makes revenue for Medicaid residents easier to forecast. Research the state's licensing process, whether new beds need approval, and staffing in the area you would serve.
See every rate on the New Mexico nursing home Medicaid rates page.
Colorado publishes a nursing home daily rate of $419.22, ranking 2nd of the 20 states compared and 48.3% above the national median.
Colorado pays nursing homes directly by the state, outside managed care. That means the published rate is the rate a facility collects for Medicaid residents, without plan contracts to negotiate. For a new operator, that predictability is valuable: you can model Medicaid revenue from the published figure and the way the state builds individual facility rates.
The rate does not tell you about occupancy, the mix of Medicaid, Medicare and private-pay residents, or the cost of staffing a building around the clock. Research those locally, along with the state's licensing requirements and any approval needed for new beds.
See the Colorado nursing home rates page.
Rhode Island publishes a daily rate of $381.06, ranking 3rd of the 20 states compared and 34.8% above the national median.
Like Colorado, Rhode Island pays nursing homes directly, outside managed care. The published rate is what you can expect for a Medicaid resident day.
Rhode Island's rate is close to Washington's and Kentucky's, so it belongs in the same tier rather than standing alone. Choosing among them comes down to local factors the rate does not capture: what nurses and aides are paid in each market, how many facilities already compete for residents and referrals, and what it would take to build or acquire a facility. Research each before narrowing your list.
Details are on the Rhode Island nursing home Medicaid rates page.
Washington publishes a daily rate of $373.84, ranking 4th of the 20 states compared and 32.3% above the national median.
Washington also pays nursing homes directly by the state, outside managed care, so the published rate is the rate you are paid. It sits just below Rhode Island and just above Kentucky.
Because daily rates can vary by facility, a useful next step is to look at how Washington builds a facility's rate: which cost components it includes, how it adjusts for resident needs, and when it is updated. That shows how a new facility would be paid. Research local wages for nursing staff, a major cost for any facility, and the state's requirements for licensing a new facility.
See the Washington nursing home rates.
Kentucky publishes a daily rate of $365.78, ranking 5th of the 20 states compared and 29.4% above the national median.
Kentucky pays nursing homes directly, outside managed care. That gives a clear revenue figure for each Medicaid resident day.
Kentucky's rate places it in the same tier as Rhode Island and Washington. The difference between them is a few dollars a day, which is small compared with the differences in staffing costs, occupancy and payer mix you are likely to find between local markets. Use the rate to put Kentucky on a shortlist, then decide on local factors: licensing, whether new beds need approval, competition and staffing.
Read more on Kentucky nursing home Medicaid rates.
Maryland publishes a daily rate of $351.63, ranking 6th of the 20 states compared and 24.4% above the national median.
Maryland, too, pays nursing homes directly by the state, outside managed care, so the published rate is what a facility collects. It is the last state in the top tier before the rate drops to North Carolina's $326.33.
For an operator comparing Maryland with the states above it, the rate gap is modest. Look at the state's method for setting individual facility rates, the share of residents you expect on Medicaid, and the cost of nursing staff in your target market. Research licensing and approval requirements for new facilities early, since they can decide whether a new build is possible at all.
See the Maryland nursing home rates page.
Michigan publishes the lowest daily rate, $99.90, ranking 20th of the 20 states compared and 64.6% below the national median. Connecticut publishes $107.21, 62.1% below it, ranking 19th.
Michigan's plans negotiate their own rates, and the published rate applies out of network, so a facility there would depend on plan contracts paying more than the published figure. Connecticut has no managed-care rule on file for nursing homes.
Above them, the gap narrows. Missouri publishes $210.39, Montana $220.15, Wisconsin $226.35 and Oklahoma $246.26, between 12.9% and 25.5% below the median. A nursing home in these states would need lower costs, higher occupancy or a larger share of non-Medicaid residents to match the economics of the top tier.
States are ordered by their published Medicaid daily rate for a nursing home stay, ranked among the 20 states compared.
We do not calculate a wage-based margin for nursing homes, because a daily rate covers a whole facility rather than one worker's time. The ranking also does not adjust for differences in the cost of living or construction between states; a high rate in a high-cost market may leave less room than a moderate rate elsewhere. The column showing distance from the national median is the cleanest way to compare states on a like-for-like basis.
Every rate is compiled from official state Medicaid publications, and each one on the site links to its source document. See the methodology for how services and units are matched.
A high daily rate tells you what Medicaid pays for a resident day. It does not tell you:
- how full your building will be, which drives revenue more than the rate;
- your mix of Medicaid, Medicare and private-pay residents;
- what nurses and aides cost in your market, and whether you can hire enough of them;
- how the state builds an individual facility's rate from its cost and resident information.
Opening a nursing home also involves licensing and, in some states, approval for new beds or facilities. Research those requirements first, since they can rule a state out regardless of its rate.
A practical way to use the ranking: for each shortlisted state, multiply the published daily rate by the Medicaid resident days you expect at a realistic occupancy, then set that against what it would cost to staff the building at local wages. The state that wins on rate does not always win on that comparison, especially where nurse and aide wages are high or where much of your census would come from other payers.
Nursing homes show four payment patterns among the top states:
- Paid directly by the state, outside managed care (Colorado, Rhode Island, Washington, Kentucky, Maryland, Nebraska, Mississippi): you collect the published rate.
- Plans must pay at least the published rate (New Mexico, North Carolina): the fee schedule is a floor in plan contracts.
- Directed payments add to plan rates (California, Pennsylvania): the state requires plans to pay additional amounts on top of their own rates, so what a facility receives can exceed the plan's base rate.
- Plans negotiate; the published rate applies out of network (New Jersey, Wisconsin, Michigan): your contracts decide your rate.
For a new operator, the first group offers the most predictable Medicaid revenue. The second group is close behind, because the published rate still sets a minimum in every plan contract.
The daily nursing home rate is the only skilled nursing service compared nationally in this ranking. Its national median is $282.59 a day, and New Jersey sits exactly on it.
The state pages break the daily rate down further where states publish more detail, so check them for add-ons and special levels of care.
Start with the skilled nursing Medicaid rates by state hub to compare nursing home rates everywhere. Then review the state pages on your shortlist, such as Colorado, Rhode Island and Kentucky, for each rate with its source.
For full access while you build a budget, see pricing. The methodology page explains how rates are compared.