Senator Nelson advocates for lifting of Medicaid funding cap

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Senator Telena Cruz Nelson (PNC file photo)

To help save access to the healthcare nearly 35,500 beneficiaries are receiving on Guam, the oversight chair of federal relations issued a letter supporting the protection of Medicaid access in all U.S. territories.

Senator Telena Cruz Nelson sent the letter to Representative Frank Pallone Jr. who chairs the U.S. House of Representatives’ Committee on Energy and Commerce, which oversees the Subcommittee on Health. The subcommittee hosted a hearing on Wednesday, March 17, 2021, entitled, “Averting a Crisis: Protecting Access to Health Care in the U.S. Territories.”

All five U.S. territories operate a Medicaid program and Children’s Health Insurance Program (CHIP). However, the territories’ Medicaid programs differ from those in the states and District of Columbia.

The most notable difference is the funding structure and the Federal Medical Assistance Percentage (FMAP). Territorial Medicaid programs statutorily receive capped federal funding, however, all states operate an open-ended funding structure.

Once territories reach their caps, their governments must fund the program with local funding.

The territorial FMAP is 55 percent, however, if the territories’ percentage were calculated under the formula used for states – which take into account the state’s average per capita income – territories would be near the state statutory maximum of 83 percent.

The Further Consolidated Appropriations Act of 2020 provided Guam an FMAP of 83-percent and an additional 6.2 percentage points during the COVID-19 pandemic. This allowed Guam to provide Medicaid coverage to 25-percent of the population, processing more than 400,000 claims in Fiscal Year 2020 and increasing payments to on-island medical providers.

“These allocations provided a buffer for what would have been a monumental fiscal dive and disaster for our healthcare community, which already faces numerous challenges, including shortages in physicians and nurses, increasing debt, unsafe infrastructure, and unfunded capital projects,” said Senator Nelson.

The federal funding helped sustain Guam’s Medicaid program throughout the public health emergency. However, the additional funds will expire at the end of September 2021 and Medicaid funding for the territories will revert to their lesser allocations, signaling a significant downward departure for the healthcare thousands on Guam have counted on during the pandemic.

Guam is currently the only territory to cover all 17 mandatory Medicaid benefits and without the additional funding would likely have to drastically reduce these benefits.

Senator Nelson wrote to strongly support H.R. 265, the “Insular Area Medicaid Parity Act,” which would eliminate the Medicaid funding caps for territories. The senator advocated that Medicaid currently serves one-fifth of Guam’s population, nearly 35,500 beneficiaries who rely on access to public healthcare and medical resources.

“Guam’s healthcare system is vulnerable without the current Medicaid funding allotment,” Senator Nelson said.

“We hope our members of Congress will contemplate the necessary continuity of this lifeline and the healthcare that our people and all U.S. territories will need even past the pandemic. We thank Rep. Pallone and Subcommittee on Health Chairwoman Rep. Anna Eshoo for initiating this important discussion and taking action to prevent us from falling off the Medicaid fiscal cliff.”

(Senator Telena Nelson News Release)

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