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Life Health > Health Insurance > Health Insurance

U.S. Territories Face Loss of Most Federal Medicaid Funding

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Public health officials in the U.S. territories are pleading with Congress to renew their “supplemental” Medicaid and Children’s Health Insurance Program (CHIP) funding.

Because the basic federal Medicaid funding stream covers only a small portion of the territories’ actual Medcaid and CHIP spending, Congress has provided a majority of the territories’ federal funding through five separate “supplemental” streams.

Authorization for all of the five supplemental funding streams — including two related to the Affordable Care Act of 2010; one from Consolidated Appropriations Act, 2017; one from the Balanced Budget Act of 2018; and one from the Additional Supplemental Appropriations for Disaster Relief Act for 2019 — have expired in the past few months or are about two expire soon, according to Anne Schwartz, executive director of the Medicaid and CHIP Payment Access Commission.

(Related: Bill Could Provide State-Level Medicaid Funding for Puerto Rico)

The House Energy and Commerce health subcommittee brought Schwartz, and public health officials from the U.S. territories, to Washington Thursday, for a hearing on the territories’ health care funding situation.

Rep. Anna Eshoo, D-Calif., chair of the subcommittee, said at the hearing, which was streamed live on the web, that Medicaid program funding for the territories has been too low and too uncertain all along.

“It’s a form of negligence to allow this to go on,” Eshoo said. “This has to change. People are desperate.”

Rep. Frank Pallone Jr., chairman of the full committee, also called for quick action on health care funding for the territories.

“Experts predict that unless Congress acts, none of the territories will have enough federal funds to support their Medicaid programs next year,” Pallone said. “Puerto Rico could potentially spend all its federal funds in a matter of months, facing a shortfall of billions of dollars for the year.”

The Territories

The United States has a population of more than 300 million and about $60,000 in annual gross domestic product (GDP) per person, or national income per person.

Here’ are snapshots of the U.S. territories, based on data provided by Schwartz, and by the National Conference of State Legislators:

Puerto Rico

  • Population: 3.4 million
  • GDP per capita: $19,310
  • Percentage of population covered by Medicaid or CHIP: 37%


  • Population: 161,000
  • GDP per capita: $31,809
  • Percentage of population covered by Medicaid or CHIP: 21%

U.S. Virgin Islands

  • Population: 102,951
  • GDP per capita: $35,302
  • Percentage of population covered by Medicaid or CHIP: 16%

American Samoa

  • Population: 57,400
  • GDP per capita: $13,300
  • Percentage of population covered by Medicaid or CHIP: 79%

Northern Mariana Islands

  • Population: 53,500
  • GDP per capita: $16,297
  • Percentage of population covered by Medicaid or CHIP: 33%

Territorial Differences

One problem the territories face is a Medicaid funding formula that’s different than the formula used for states. States get funding based on the number of people in Medicaid and actual costs. The territories get a basic allotment that grows with the overall inflation rate, not the much higher health care cost inflation rate.

Witnesses said another problem they have, in addition to low and erratic federal funding, is federal officials’ lack of understanding of what conditions in the territories are like.

Puerto Rico, for example, is coping with the effects of devastating hurricanes, but it has a large population; a large, publicly traded private insurer; and many health care providers and hospitals.

The other territories have fewer than 200,000 residents each, and those residents are scattered over many different islands. Those territories have just one or two hospitals, and they have to pay high rates to get drugs, medical equipment and other medical supplies shipped in. When residents develop complicated, serious health problems, the territories have to pay to transport the patients to hospitals in bigger communities by air.

Medicaid for Most

Sandra King-Young, American Samoa’s Medicaid director, said many officials outside American Samoa may not realize that Medicaid is the only significant source of health coverage in the territory.

The American Samoa simply assumes, given that per capita GDP is just $13,000, that all residents, including cannery workers and government officials, are eligible for Medicaid or CHIP.

“We don’t do individual enrollment,” King-Young said.

King-Young said supplemental health care funding that American Samoa has been getting through the ACA has given the territory the ability to refer patients to off-island facilities for procedures not available at the local hospital.

“Amputees, diabetics, orthopedic and cancer patients have benefited from our off-island referral program,” King-Young said. “All of these success stories hinge on the presence of the ACA monies.”

If Congress fails to keep the ACA funding stream in place before the current Sept. 30 expiration date, “it literally will mean the loss of lives and permanent disabilities for people who will lose access to medically necessary care,” King-Young said.

The Bills

Rep. Stacey Plaskett, D-U.S. Virgin Islands, is sponsoring H.R. 1354, the Territories Health Equity Act of 2019 bill, in the House. The bill would provide a permanent Medicaid funding stream for the territories that would be similar to the Medicaid funding stream for the states.

Sen. Bernie Sanders, a Vermont independent, is sponsoring a companion bill, S. 1773, in the Senate.

Most of the bills’ cosponsors are Democrats, but Plaskett has lined up two Republican cosponsors from the U.S. territories: Rep. Jennifer Gonzalez-Colon of Puerto Rico and Rep. Aumua Amata Coleman Radewagen of American Samoa.


Links to information about the hearing, including a video recording of the hearing, are available here.

The official information page for S. 1773 is available here.

— Read Puerto Rico Needs a Better Debt Dealon ThinkAdvisor.

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© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.