September 16, 2021 (Saipan, CNMI) – Imagine a health care system that serves over 3.5 million U.S. citizens (more than the state of Utah) facing up to an 85 percent cut to its federal funding allocation every few years. This is the case for the five U.S. territories — American Samoa, the Commonwealth of the Northern Mariana Islands (CNMI), Guam, Puerto Rico, and the U.S. Virgin Islands — and the Americans that live there. While Congress has provided a patchwork of short-term, enhanced funding solutions for the U.S. territories through recent appropriation bills, they are set to expire on Sept. 30, 2021, which could trigger a “Medicaid funding cliff” and result in drastic cuts to territorial Medicaid programs. There is a need for a permanent solution to ensure equitable financing and access to health services for individuals living in U.S. territories, on par with states.
The total Medicaid federal funding allotment and the Federal Medical Assistance Percentage (FMAP) is capped for the U.S. territories, and appropriations to temporarily increase these caps frequently expire. Currently, for the 50 U.S. states and the District of Columbia, there is no cap on how much the federal government can contribute to the Medicaid program because it is an open-ended federal entitlement. The federal government must meet its financial obligation on all appropriate state spending per a pre-determined “match” formula. The U.S. territories’ funding for Medicaid is capped, and the match is fixed at 55 percent by law.
Years of scarce resources impacted how territorial Medicaid programs often operate in complex geographical, political, and fiscal situations. There are vast disparities between what states and territories can do simply because of the statute that treats them inequitably. Despite these ongoing challenges, in the CNMI, we have exceeded expectations on many levels, including financial strength, health care quality, medical workforce expansion, specialty services implementation, and bringing quality, certified laboratory services to our islands. Investing upfront in these valuable additions has allowed us the resilience in the wake of two of the worst storms in U.S. history and the ongoing COVID-19 pandemic that has gutted our tourism industry. We have many plans for further improvements; however, none are possible without a secure financial future.
Should Congress let the territories go over the funding cliff, the CNMI federal allocation for the Medicaid program would be cut from $62.3 million to $7.2 million and revert to a matching rate of 55 percent. We will be forced to make life or death decisions; how many patients can be served, what benefits are offered, how much providers are paid, and many other systemic supports. And when care is not provided at home on our islands, many islanders will travel to the continental United States, away from their family and community, to seek care at a higher cost to the U.S. taxpayer. All of this, of course, during the COVID-19 pandemic.
It is no secret that this month is packed for members of Congress and their staff with many priorities, including but not limited to funding the federal government, raising the debt ceiling, and reauthorizing other pieces of critical legislation. Fortunately, the bipartisan bill Supporting Medicaid in the U.S. Territories Act of 2021 (H.R. 4406) was passed out of the House Energy and Commerce Committee in July. The bill includes an authorization for five years of Medicaid funding for Puerto Rico and eight years for the other territories. H.R. 4406 also includes FMAP levels for five years at 76 percent for Puerto Rico and 83 percent for eight years for the other territories. If approved by Congress and signed into law by President Biden, the U.S. territories’ Medicaid programs would be on solid ground for the near future and provide a runway for the health programs on the islands the opportunity to expand current services to improve health outcomes.
Congress has the power to treat all U.S. citizens equitably when it comes to Medicaid and the health care services the program provides. However, the current funding and reimbursement structures underfinance care in these jurisdictions where the need is immense, and population health challenges are significant. The moment is now for Congress to improve the lives of 3.5 million Americans.
Dr. Esther Muña, Ph.D, M.H.A., F.A.C.H.E., is the Chief Executive Officer of the CNMI Commonwealth Healthcare Corporation and a member of the Board of Directors, Association of State and Territorial Health Officials.