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 have been exacerbated by latest pure disasters and the COVID-19 pandemic. Over time, Congress has offered extra federal funding typically to handle emergencies and extra financing wants past the Medicaid allotments set in regulation. Latest funding will increase have been set to run out on the finish of FY 2021, however administrative motion helped to keep away from a pointy decline in federal Medicaid financing on the finish of FY 2021. The Construct Again Higher Act (BBBA) features a everlasting statutory improve to the territories’ Medicaid allotments and match charges. This coverage watch examines how Medicaid funding for the territories works, the present allotments, and the way BBBA would change Medicaid funding for the territories going ahead. Whereas a model of BBBA has handed the home, its destiny within the Senate stays unsure.
In contrast to 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 (often known as the Part 1108 allotment) and the territories’ federal matching fee (often known as the federal medical help proportion, or FMAP) are mounted in statute. This funding association is not like federal Medicaid funding for states the place federal {dollars} are uncapped and the FMAP is adjusted yearly based mostly on a state’s relative per capita revenue. As soon as a territory exhausts its capped federal funds, it not receives federal monetary help for its Medicaid program throughout that fiscal 12 months.
Over time, Congress has offered will increase in federal funds for the territories broadly and in response to particular emergency occasions. Most lately, the Additional Consolidated Appropriations Act of 2020 and the Households First Coronavirus Response Act (FFCRA) considerably elevated the allotments for every of the territories for FY 2020 and FY 2021 (seven to 9 occasions the statutory ranges) and in addition raised the FMAP charges from the statutory degree of 55% to 76% for Puerto Rico and 83% for the opposite territories. These statutory modifications to the allotments and the match fee expired on the finish of September. Nevertheless, like different states, the territories are additionally eligible to obtain a 6.2 proportion level improve to the statutory Medicaid match fee by way of the top of the quarter by which the general public well being emergency (PHE) expires if sure upkeep of eligibility necessities are met.
On the finish of September 2021, CMS calculated FY 2022 allotments for the territories based mostly on allotments for FY 2021 (aside from Puerto Rico the place calculations have been based mostly on allotments for FY 2020). These calculations helped to keep away from a fiscal cliff in federal Medicaid funding for the territories that would have resulted in vital reductions to eligibility ranges and advantages. These calculations characterize will increase of round 3% for all territories in comparison with their FY 2021 allotment aside from Puerto Rico, which might see a lower of round 2% from FY 2021 (Determine 1). In November 2021, the GAO launched a non-binding authorized opinion that CMS didn’t have the authority to regulate the bottom for the FY 2022 federal allotment for Puerto Rico based mostly on the FY 2020 allotments, however President Biden lately said that Puerto Rico will obtain $2.9 billion in Medicaid funding. CMS famous the calculations associated to the allotments wouldn’t have an effect on the FMAP charges that may return to the statutory 55% (with an extra 6.2 proportion factors out there below the general public well being emergency) on October 1, 2021. Nevertheless, a previous persevering with decision maintained FMAP charges of 76% for Puerto Rico and 83% for the remainder of the U.S. territories by way of December 3, 2021. The latest persevering with decision handed by the Home would lengthen these FMAP charges for all territories (besides Puerto Rico) by way of March 11, 2022. Puerto Rico’s present FMAP fee is 55%.
The Construct Again Higher Act (BBBA) proposed everlasting will increase in federal allotments and matching charges for the U.S. territories. The BBBA that handed the Home and the draft launched by the Senate Finance Committee each embody provisions to extend the capped federal allotment and stuck matching charges for the U.S. territories (Determine 1). In comparison with their FY 2021 allotments these proposed allotments characterize modest will increase of 5 – 8% for American Samoa, USVI, and Guam and extra vital will increase of 17% and 20% for CNMI and Puerto Rico, respectively. Moreover, FMAP charges would improve to 83% for all territories besides Puerto Rico. Puerto Rico would obtain an FMAP fee of 76% in FY 2022 and a fee of 83% in subsequent years depending on Puerto Rico establishing a reimbursement flooring for supplier funds.
The passage of the BBBA would supply Puerto Rico and the territories with extra certainty of their federal funding and FMAP charges. The BBBA supplies a everlasting improve within the federal allotments and match charges for all territories. With out the BBBA, the FY 2022 allotment for Puerto Rico will stay barely decrease relative to FY 2021. As well as, the persevering with decision that may lengthen the improved match fee for the territories (besides Puerto Rico) will expire on March 11, 2022. When this occurs, all territories would see decrease FMAP charges ensuing within the territories needing to contribute extra native funds to attract down federal funds.