[When considered altogether, according to MACPACs report, their
Medicaid programs will be more than $1 billion short.]
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MEDICAID FUNDING SLASHED IN U.S. TERRITORIES  
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Selena Simmons-Duffin
November 20, 2019
NPR
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_ When considered altogether, according to MACPAC's report, their
Medicaid programs will be more than $1 billion short. _

Sandra King Young runs Medicaid in American Samoa, a U.S. territory
that faces dramatic funding cuts to islanders' health care unless
Congress acts. "This is the United States' shame in the islands," she
says. , Selena Simmons-Duffin/NPR

 

Right now, there are dozens of patients — U.S. citizens — in New
Zealand hospitals who are fighting the clock. They have only a few
weeks to recover and get home to the tiny island of American Samoa, a
U.S. territory in the South Pacific.

"We have a cancer patient that is coming back in December," says
Sandra King Young
[[link removed]],
who runs the Medicaid program in American Samoa. "We can only give him
six weeks of chemo, radiation and surgery. He has a good chance of
survival if he has the full year of treatment, but not six weeks. The
patient and family understand, and since they have no money, they have
agreed to come back."

The federal money to fully fund the Medicaid program in American Samoa
and in all other U.S. territories is about to run out. As a
consequence, the off-island referral program to treat conditions that
the territory doesn't have the local capacity or facilities to treat
— the program that brought these patients to New Zealand — is
getting shut down.

"It's devastating for those people who need those lifesaving
services," King Young says. "People who need cancer treatment won't
get it. Children with rheumatic heart disease won't get the heart
surgeries that they need."

All five of the U.S. territories affected — collectively home to
more than 3 million Americans — are now desperately trying to figure
out how to keep Medicaid running with only a fraction of the money
they've had for the last several years. If Congress doesn't increase
the amount of designated money by the end of the year, the U.S. Virgin
Islands
[[link removed]]
and Guam
[[link removed]]
say they would need to cut their Medicaid rolls in half; Puerto Rico
says it would need to cut back dental and prescription drug services.

This is what people working on the issue have come to call the
"Medicaid cliff."

HOW DID WE GET HERE?

When it comes to Medicaid, the federal government treats U.S.
territories differently from how it treats states.

In U.S. states, the amount that the federal government contributes to
Medicaid varies based on a formula in the law that relies on per
capita income in each state. For instance, Alabama has a match rate of
72%
[[link removed]];
what this translates to is that for every dollar Alabama spends on
Medicaid, the federal government contributes about $2.57 to the
program.

But that's not how it works in the territories, where even though the
populations are all low income, the federal government's match rate is
set in statute at 55%. What this translates to is that for every
dollar a U.S. territory spends on Medicaid, the federal government
contributes $1.25.

The other significant difference is that the federal contribution to
Medicaid in the territories is capped, with a set allotment of federal
funds every year. Federal spending on Medicaid in states is not.

The low matching rate and the annual cap — that's pretty much how it
has always been for Medicaid in the territories, says Robin Rudowitz
[[link removed]], who co-directs the
Program on Medicaid and the Uninsured at the Kaiser Family Foundation.
"These particular provisions historically have always been part of how
they have been financed," she says.

Here's how the territories found themselves peering over the "Medicaid
cliff." For the last few years, the territories have had billions of
dollars more in federal funding to run their programs than their usual
capped allotments. First, the Affordable Care Act provided a one-time
grant
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of $7.3 billion (which kicked off in 2011) for the territories'
Medicaid programs. Then, in 2017, after two Category 5 hurricanes
ravaged Puerto Rico and the U.S. Virgin Islands, an extra $4.9 billion
designated for their Medicaid programs was added to the 2018
Bipartisan Budget Act
[[link removed]].

 

The Family Health Center Susana Centeno on remote Vieques island, part
of Puerto Rico, was forced to close after it suffered damage from
Hurricane Maria in 2017.

Xavier Garcia/Bloomberg/Getty Images

Now, we've come to the cliff's edge. Most of these two pots of money
ran out at the end of September, with just a bit of funding from the
ACA still available through the end of 2019.

That leaves, essentially, just the capped allotment of federal dollars
for each of the territories — far less than what the territories
have come to rely on to provide care to their Medicaid enrollees in
recent years.

"The capped financing amounts were low and did not meet all of the
needs of the population in the territories," says Rudowitz. If the
additional federal contributions are gone for good, she says, "given
the share that they represent of the financing for Medicaid in these
territories, it would mean major changes and reductions in care."

The territories have known that this funding cliff was coming for
years — the end to a major portion of the money was written into the
ACA. Island health officials and care providers hoped Congress would
have legislated a more permanent solution by now, but it hasn't.

In recent months, Congress has passed continuing resolutions that have
allowed the territories' Medicaid programs to keep limping along. But
without legislation that appropriates more money, the territories'
Medicaid programs all are in serious trouble.

The Medicaid and CHIP Payment and Access Commission, known as MACPAC,
a nonpartisan government group that advises Congress on Medicaid
policy, projected in July
[[link removed]]
that all the territories will have budget shortfalls in 2020. When
considered altogether, according to MACPAC's report, their Medicaid
programs will be more than $1 billion short.

This is why Medicaid directors in the U.S. territories are all
sounding the alarm. King Young, of American Samoa, points to news
coverage as far back as the 1960s
[[link removed]]
that described her island as "America's Shame in the South Seas"
because of rampant pollution and neglect.

"Right now, this is the United States' shame in the islands," she
says. "Tell me if that's acceptable in the United States, to stand by
and say, 'Oh, sorry, we can't give you that stent or that pacemaker,
so it's likely that you'll have a stroke or heart attack and —
that's it.' That's what it means not to have enough Medicaid funding
for the territories."

"FULL-COURT PRESS" IN CONGRESS

The territories have been lobbying Congress, urging members to
appropriate more funds for their Medicaid programs so health officials
on the islands can avoid these hard choices — between, for instance,
keeping a hospital going and paying for a patient's cancer treatment.

Each territory has a nonvoting delegate in Congress. Puerto Rico also
sent an additional delegation from the island last week to make the
case to lawmakers that something must be done to stave off disaster.

"I would say that we've been doing a full-court press this entire
calendar year," says Jennifer Storipan, executive director of the
Puerto Rico Federal Affairs Administration. "Gov. [Wanda] Vázquez has
said that Medicaid funding is her highest priority for the island
right now."

A bill
[[link removed]]
to temporarily increase funding to the territories' Medicaid programs
was passed
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by the House Energy and Commerce Committee in July but has yet to make
it to the floor for a vote. It would greatly increase the federal
match rate for Medicaid in all the territories and allocate a bonus $3
billion a year — but only for the next four years. There is no
companion bill in the Senate.

"We're in active negotiations with the Senate, but there is some
opposition to our bill in the Senate," says Rep. Darren Soto
[[link removed]], D-Fla., who introduced the House
legislation with Rep. Gus Bilirakis [[link removed]],
R-Fla. Both represent districts in central Florida that have huge
Puerto Rican populations, and Soto is of Puerto Rican descent. In the
House, the bill has bipartisan support.

Opponents of the bill in the Senate say they worry that the billions
of dollars that the territories are requesting could be misspent. Some
senators have raised particular concerns about Puerto Rico. During a
recent corruption probe, a Puerto Rican Medicaid official was arrested
— that news emerged
[[link removed]]
just a few days before a committee hearing on the territories'
Medicaid bill in July.

"So that didn't help," Soto says. Integrity provisions were added to
the House bill, he says, specifically addressing concerns about Puerto
Rico. "We do need to take it seriously and make sure that tax dollars
are safeguarded," he says, but adds, "There have been fraud instances
in many states too, and we don't take away their Medicaid funding."

Some congressional Republicans note that the funding cliff was created
by the Affordable Care Act, which gave extra funding to the
territories for a limited time. In a letter
[[link removed]]
to Secretary of Health and Human Services Alex Azar in July, several
Republican members of the Senate Finance Committee raised concerns
about Puerto Rico's Medicaid spending.

"We are again confronting proposals for what amounts to another
extension of boosted funding with no permanence or certainty and
without any resolution of the Medicaid funding cliff constructed as
part of the ACA," they wrote.

"It is true: Giving these additional funds with a set expiration date,
the legislation itself did create the cliff," acknowledges the Kaiser
Family Foundation's Rudowitz. However, she says, Congress now should
consider "the implications of letting that cliff happen and what that
means to the health care systems in these territories."

PLANNING FOR THE WORST

Medicaid program administrators from each of the territories gathered
in an impromptu meeting outside the annual Medicaid directors
conference [[link removed]] last week. They
have spent a lot of time together in Washington recently, testifying
before congressional committees about the Medicaid funding crisis as
it approaches.

"We were here in May
[[link removed]].
We were here in June
[[link removed]],"
Michal Rhymer-Browne [[link removed]],
assistant commissioner with the Virgin Islands' Department of Human
Services, told NPR that day. "We pleaded. We shared ourselves —
everything that we could."

Despite their pleas, Congress has yet to act.

There are three options for managing a slashed budget for a program
like Medicaid: reduce the size of payments to providers, cut the rolls
or cover fewer services. All the territories say there's no way to go
lower on provider payments — Puerto Rico's struggle with provider
flight
[[link removed]]
because of low pay is well known. So cutting the rolls and covered
services is where the programs would need to find cuts,
representatives of the territories say.

"Guam and [the Northern Mariana Islands] are about to topple over the
cliff," Rhymer-Browne says. "And for the Virgin Islands, we are
nearing the cliff and seeing the bottom right now."

Many of the territories would like to make improvements in the care
they provide — invest in better facilities, recruit great health
care providers, improve preventive care. All of that comes with
upfront costs, they say, and they've had so much budget uncertainty
that it has been impossible to move forward with those kinds of
projects.

Right now, they're just trying to keep the lights on.

"The urgency is here for us to let our congressional members know —
even going to January is extremely dangerous," Rhymer-Browne says.
"It's already catastrophic for our territories. We really need them to
make a move."

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