WASHINGTON, Jan. 22 (UPI) -- Medicaid in many states pays nursing-home workers an average of $7.17 an hour, below the federal minimum wage of $7.25, a U.S. nursing-home association says.

"This report reveals a truth many would not believe -- today's nursing facilities are paid less than the minimum wage," Mark Parkinson, president and chief executive officer of the American Health Care Association, says in a statement.

"That must change if we ever hope to serve the needs of a baby boom generation that will only stress our care delivery system further."

The study, conducted by the research group Eljay, finds Medicaid programs in states across the country underfunded nursing facility care by $5.6 billion in 2010.

Nursing-home providers often turn to other sources of funding -- primarily Medicare -- to fill in the funding gaps resulting from inadequate Medicaid payments. However, Parkinson cautioned with many states faces budget deficits, there is a danger of allowing an already squeezed Medicare system to prop up Medicaid payment rates.

"There is a vast gap between the actual cost of providing quality elder care and what the Medicaid program truly finances," Parkinson stated.

Medicaid funds 64 percent of the care for the elderly and disabled provided in America's skilled nursing facilities.