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Biden Budget Calls for Parity for Territories in Critical Safety Net Programs

President Biden’s 2022 budget would take a crucial step toward giving residents of U.S. territories equal access to the nation’s safety net. Without offering specific funding recommendations, the budget calls for “eliminating Medicaid funding caps for Puerto Rico and other Territories while aligning their matching rate with States (and moving toward parity for other critical Federal programs including Supplemental Security Income [SSI] and the Supplemental Nutrition Assistance Program [SNAP]).”  

The five inhabited territories — Puerto Rico, Guam, U.S. Virgin Islands, Northern Mariana Islands, and American Samoa, which together are home to roughly 3.6 million people — have among the nation’s highest poverty rates. They also have long grappled with severe economic decline, outmigration, and, more recently, devastating natural disasters.

The President’s call for parity comes just months ahead of a severe Medicaid funding cliff for all the territories, including the most populous of them, Puerto Rico, which has nearly 1.4 million Medicaid enrollees. Time-limited supplemental federal funds for the territories will expire on September 30. The territories’ federal Medicaid matching rates are far lower than those afforded to states and, unlike the states, the territories’ annual funding is capped at a level that doesn’t come close to covering their Medicaid costs. These limitations translate into inferior coverage and recurring funding cliffs as Congress seeks to address ongoing funding needs with temporary funding increases.

Similarly, Puerto Rico, Northern Mariana Islands, and American Samoa receive fixed block grants to run nutrition programs in lieu of SNAP. Because this funding is fixed, funding constraints — not need — shape benefits and eligibility, so the programs are less responsive to need and likely provide less generous benefits than in SNAP for many households. (Guam and the Virgin Islands participate in SNAP.)

In the case of SSI, only residents of the Northern Mariana Islands can participate. Puerto Rico, Guam, and the Virgin Islands instead receive a federal block grant called Aid for the Aged, Blind, and Disabled (AABD), which provides far lower benefits and eligibility. In Puerto Rico, for instance, nearly half of its disabled residents live in poverty (twice the U.S. average), yet monthly AABD benefits are just a fraction of SSI’s. American Samoa has neither SSI nor AABD. 

In light of these evident and longstanding gaps, providing the territories with equitable access to these three key programs would greatly aid their recoveries. And it would mark a big step in mending racial disparities created by policies that have historically excluded territories from the nation’s economic and health security programs.