Pacific Island Territories Need Disaster Relief Funding for Medicaid

The disaster relief bill that the Senate’s expected to pass this week doesn’t include critical Medicaid funds that Guam, the Northern Mariana Islands, and American Samoa need to continue providing health care to their residents. All three areas experienced widespread destruction last year: Guam and the Northern Marianas from typhoons, American Samoa from a cyclone.

The Northern Marianas was expected to run out of federal funds in March; Guam and American Samoa have access to more federal funds but lack the matching funds of their own needed to access them, partly due to the damage from these disasters. The House-passed disaster relief bill includes funds for all of these Pacific Island territories — a far better approach, which a House-Senate conference committee should adopt in a final bill.

Unlike the states, whose federal funding covers a specified share of their Medicaid spending, the territories (including Puerto Rico and the Virgin Islands) receive a fixed amount of federal funding in the form of a capped block grant. And while each state’s matching rate is tied to its relative per capita income and can go as high as 83 percent, the territories’ matching rate is fixed at 55 percent, irrespective of need. As a result, the territories’ federal Medicaid funding is inadequate to cover their needs. American Samoa’s block grant was $11.5 million in fiscal year 2017 but its total Medicaid spending was $34.5 million, for example. Health care spending in Guam and the Northern Marianas also far exceeded their block grants.

Despite their inadequate block grants, the territories have avoided cutting their Medicaid programs, because they received added federal funds through the Affordable Care Act (ACA) beginning in 2011. But the Northern Marianas has exhausted its ACA funds, and Guam and American Samoa can’t provide the matching funds needed to draw down theirs. American Samoa is struggling to find funding for its medical center, which is its only Medicaid provider and cares for almost all the territory’s residents — three-quarters of whom qualify for Medicaid.

Thus, the House disaster bill’s funding is critical for the Pacific Island territories to sustain their Medicaid programs through the fiscal year. The bill would provide $36 million to the Northern Marianas to carry it through the year, and it would let Guam and American Samoa draw down their remaining ACA funds (which expire September 30) without spending more of their own funds.

The Medicaid block grants for Puerto Rico and the Virgin Islands are also inadequate: Puerto Rico received $347 million in federal fiscal year 2017 but spent more than $2.4 billion, and the Virgin Islands received $17.3 million but spent almost $70 million. These territories don’t need more Medicaid funds this fiscal year because they received added funds after Hurricanes Maria and Irma. But these funds will also expire September 30, which means that all territories will face a funding cliff at that point.

Thus, Congress will need to address shortfalls for all the territories later this calendar year. But the priority now is to include the House bill’s funding for the Pacific Island territories in the final disaster relief bill.