The united statesterritories – American Samoa, the Commonwealth of the Northern Mariana Islands (CNMI), Guam, Puerto Rico, and the U.S. Virgin Islands (USVI) – have confronted an array of longstanding fiscal and well being challenges that had been exacerbated by considerably current pure disasters and the COVID-19 pandemic. Over 1.7 million folks residing within the territories had been enrolled in Medicaid in fiscal 12 months (FY) 2023. Medicaid financing within the territories differs from the states as a consequence of a statutorily set Federal Medical Help Share (FMAP) and an annual ceiling in federal funding that has traditionally resulted in decrease ranges of funding and sometimes well being care protection and entry.
Over time, Congress has supplied short-term supplemental federal funding and will increase to the FMAP fee in response to emergencies past the Medicaid allotments set in statute. Most just lately, the Households First Coronavirus Response Act (FFCRA) considerably elevated allotments for the territories and the 2023 Consolidated Appropriations Act (CAA) included a everlasting statutory improve to 83% (from 55%) for many of the territories’ Medicaid allotments and FMAP charges, besides Puerto Rico. In Puerto Rico, the allotments are set in statute by way of FY 2027, and the FMAP was elevated to 76% and set to run out after FY 2027 and return to 55% with out legislative motion.
Whereas neither candidate has introduced detailed coverage proposals within the marketing campaign, the result of the 2024 election might have implications for the American territories. In a just lately launched coverage truth sheet, Vice President Harris highlights a number of initiatives to help Puerto Rico, together with calling for Congress “to pursue parity and equal entry to key federal packages that help well being care, diet, and different vital wants for low-income households, seniors, and folks with disabilities.” As well as, the Biden-Harris administration proposed eliminating Medicaid funding caps for the American territories and bringing FMAP charges in parity with the states of their FY 2025 price range. In distinction, former President Trump beforehand proposed decreasing Medicaid funding for Puerto Rico and has supported proposals to cap and cut back Medicaid financing and the FMAP, which might impression the territories as nicely. This subject temporary offers background on how Medicaid financing differs between U.S. territories and states and the implications of those variations.
How does Medicaid within the territories differ from the states?
Not like within the 50 states and D.C., annual federal funding for Medicaid within the U.S. territories is topic to a statutory cap and stuck matching fee. Each the capped federal allotment (referred to as the Part 1108(g) allotment) and the territories’ FMAP are fastened in statute. Annual federal Medicaid funding is ready in statute for Puerto Rico for FY 2023 by way of FY 2027 and will increase within the allotments are tied to the medical care element of the Shopper Worth Index for All City Shoppers (CPI-U) for the remainder of the territories. This funding association is not like federal Medicaid funding for states, the place federal {dollars} are uncapped and the FMAP is adjusted yearly primarily based on a state’s relative per capita revenue. As well as, the territories obtain Part 1935(e) funding, often known as the Enhanced Allotment Program (EAP), which can be utilized to offer prescription drug protection below Medicaid for low-income Medicare beneficiaries who would in any other case be eligible for subsidies below Medicare Half D. Most territories obtain funding for Medicaid knowledge techniques, and Puerto Rico receives extra funds for doctor cost charges and for program integrity by way of FY 2027.
Medicaid packages within the territories have programmatic variations in protection and advantages in comparison with the states. Not like the states, the territories develop their very own measures relatively than use federal poverty ranges (FPL) to find out eligibility for Medicaid for the inhabitants. CNMI and American Samoa function Medicaid packages below waivers so they don’t seem to be topic to most program necessities, together with flexibility that permits them to waive protection of any advantages which are necessary within the states when wanted.
What are current Medicaid financing adjustments for the Territories?
The 2023 CAA included a everlasting statutory improve in territories’ Medicaid FMAP fee, besides in Puerto Rico, the place the rise will expire on the finish of FY 2027. Congress has beforehand licensed each everlasting and supplemental will increase within the FMAP fee for the territories broadly and in response to particular emergency occasions (Desk 1). Following the passage of the Inexpensive Care Act (ACA), the FMAP fee for territories was elevated from 50% to 55% in 2011, and at the start of FY 2020, in the course of the COVID-19 pandemic, the FMAP was quickly elevated to 100%. For the rest of FY 2020 by way of the start of FY 2023, Congress elevated FMAP charges from 55% to 83% for American Samoa, CNMI, Guam, and USVI and from 55% to 76% for Puerto Rico (with a further improve of 6.2% if sure upkeep of eligibility necessities had been met). With the 2023 CAA, Congress made the short-term FMAP improve to 83% everlasting for American Samoa, CNMI, Guam, and the USVI, whereas authorizing a short lived improve to Puerto Rico’s FMAP to 76% by way of FY 2027. The regulation additionally offers 100% federal funding for qualifying knowledge system enhancements for American Samoa, CNMI, Guam, and USVI, as much as $20 million for all 4 of the territories.
Along with the change within the FMAP charges, annual federal capped funding for the territories elevated considerably in FY 2020. The FFCRA elevated allotments for every of the territories for FY 2020 and FY 2021 after which CMS used these ranges as the brand new base for FY 2022 and past, aside from Puerto Rico, the place capped quantities are set in statute by way of FY 2027. The annual capped funding for Puerto Rico might be $3.475 billion for FY 2025, $3.645 billion for FY 2026, and $3.825 billion for FY 2027. After FY 2027, the allotments for Puerto Rico might be calculated from the a lot decrease FY 2019 base and not using a legislative change.
What are the implications of the Medicaid financing construction within the territories?
The capped federal Medicaid funding construction within the territories contributes to value shifts to the territories and/or protection restrictions. As soon as a territory exhausts its capped federal funds, the territory should use native funds to cowl prices of protection or could droop or restrict providers. Traditionally, all the territories have reported depleting the capped federal funds earlier than the fourth quarter of the 12 months. Medicaid packages in American Samoa and CNMI have just lately suspended or restricted a variety of providers for elements of the fiscal 12 months as a consequence of funding constraints, regardless of the current will increase in allotments and FMAP charges.
Within the absence of extra statutory adjustments, annual federal allotments for Medicaid in Puerto Rico will drop and the FMAP fee will drop to 55% in FY 2028. Beneath the 2023 CAA, Puerto Rico’s annual federal allotment will drop in FY 2028 as a result of it will likely be re-calculated primarily based on the annual FY 2019 cap adjusted to the medical element of the CPI-U with out regard for the extra funding acquired between FY 2020 and FY 2027, and the FMAP will return to 55% in FY 2028. Each of those adjustments would lead to important reductions in federal Medicaid funding for Puerto Rico. Past changes for Puerto Rico, proposals just like the Territories Well being Fairness Act would deal with the territories like states for Medicaid funding and eradicate federal funding caps if enacted by Congress.
Limits on federal Medicaid funding contribute to rising challenges for the territories in addressing well being care wants of their residents given rising poverty, infrastructure, and environmental challenges. Research have discovered that the territories rank worse than the states on well being care high quality measures and well being outcomes. The territories even have larger charges of poverty and unemployment, and all of the territories, aside from Puerto Rico, even have larger charges of uninsured folks than the U.S. inhabitants total (Appendix Determine 1). Limitations in federal knowledge on the American territories, together with gaps in federal statistics and Medicaid claims reporting, and restricted native public well being workforce capability could cut back authorities capabilities to know and deal with these challenges. The territories have additionally develop into more and more vulnerable to pure disasters and environmental hazards as a consequence of local weather change in addition to U.S. colonial and army exercise, which might exacerbate inhabitants loss as a consequence of outmigration and additional negatively impression island economies. Latest catastrophe occasions in Puerto Rico have additionally proven how they negatively impression well being outcomes and the psychological well being of residents within the long-term.
