Congress Closer to Helping USVI Avoid Medicaid Cliff

U.S. Capitol. (NBC News image)
U.S. Capitol. (NBC News image)

The U.S. Senate Finance Committee has reached an agreement on a drug pricing and health extenders bill, which includes a package to extend and increase Medicaid funding in the territories.

The move does not yet save the territory from sharp, wounding cuts to Medicaid funding that, absent Senate action, will soon strike. But the news signals substantial progress and new hope that the ax may not fall after all.

At stake are hundreds of millions of dollars in federal funding, impacting not just hospitals and health care providers but the entire V.I. economy and 15,000 of the 29,000 Virgin Islanders who rely upon Medicaid for healthcare.

“This agreement comes after months of discussion between our office and House and Senate members on the need to resolve the Medicaid Cliff by the end of the year, including increased funding for the territories and a greater percentage of funding from the federal government.” Delegate Stacey Plaskett said in a statement from her office.

Sens. Chuck Grassley (R-IA) and Ron Wyden (D-OR) cosponsored the new version of the bill and Grassley, the powerful committee chair, spoke in support on the Senate floor Monday.

In a statement, Grassley said the bill “should receive a vote soon in the Senate, where it would surely pass with overwhelming support.”

Much of the bill is about drug pricing, but it contains several provisions of critical import to the territory. Grassley said President Donald Trump has indicated support for the bill and the Washington Post called the legislation the “the drug pricing bill with the best chance of passing Congress.”

While Democrats in the House of Representatives have been supportive, support in the Republican-led Senate and from the Republican president make a big difference in the likelihood of passage.

Delegate to Congress Stacey Plaskett
Delegate to Congress Stacey Plaskett

The text of the newest version of the bill approved in committee Monday was not available at the congressional bill tracking website as of Monday night.
According to Plaskett, the specific Medicaid language in the Senate proposal includes:

1 – All territories, including the Virgin Islands, will receive a 4-year deal.
2 – $126 million annual funding increase for the Virgin Islands for each of fiscal years 2020-2023, which is the same annual increase that was proposed in the bill prepared in the U.S. House of Representatives.
3 – Federal matching funds for the Virgin Islands will remain at the same rate of 100 percent through Dec. 20.
4 – From Dec. 21, 2019, through the end of 2023, the rate of federal matching funds will be 83 percent for Virgin Islanders.

Plaskett said that is a significant increase from the previous 55 percent cap, and it is the highest possible rate that any state may receive.

The changes largely encapsulate changes Plaskett, Gov. Albert Bryan Jr. and some members of Congress have been pushing for and, if enacted, would be a significant change from how Medicaid has historically been funded in the USVI and other insular territories.

“The deal and resulting Medicaid bill from the U.S. Senate addresses each of the requests made by me and my colleagues in the House bill, the REACH Act, which passed in the House Energy and Commerce Committee in July of this year,” Plaskett said.

“Many were unsure what language would come out of the Senate, and this is far better than what had been originally discussed,” she said.

Plaskett painted the news as a triumph of working across the aisle in a bipartisan manner.

“My office has spent a tremendous amount of time advocating with my bipartisan Senate counterparts. This language shows that those relationships have paid off,” Plaskett said. “This is a tremendously positive step and relieves the tension felt by many as we awaited a decision that would determine what federal funding would be available for Medicaid services in the next few years. While this is not the number of years we requested, should this bill become law, it ensures that we will be able to continue supporting the thousands of Virgin Islanders currently on Medicaid.”

While Plaskett’s statement indicates the bill will likely pass the Senate and be signed into law, that has not happened yet. The current level of funding was set to expire on Oct. 1, but Congress has twice extended it briefly. It is now set to expire Dec. 20 unless Congress and the president act before then. Without action, the territory will see an overall cut of more than $60 million per year and the hospitals will lose more than $6 million each.

So what is this money and what is going on? Medicaid is the federal insurance program for those unable to afford other insurance. States manage their programs, which are funded by federal money, supplemented with state money. The USVI program is called the Medical Assistance Program, or MAP. The federal government historically required the USVI to put up 45 cents for every 55 cents in federal Medicaid funding. States with comparable demographics put up 17 cents for every 83 cents in federal money. So to get $100 million in total, Alabama, for example, might spend $17 million of local funds, while the USVI would have to spend $45 million, or $28 million more than Alabama.

The total amount available increased in 2013 with the passage of the Affordable Care Act, but the match did not, limiting the amount of Medicaid the territory could afford to provide through its local Medical Assistance Program. Because the V.I. government’s finances were tight, especially after the 2012 closure of the Hovensa refinery, it was unable or unwilling to cut other programs to pay enough in local matching funds to get every available Medicaid dollar.

But it did get a big bump.

In 2009, before the Affordable Care Act’s Medicaid increases, the USVI had 10,000 residents receiving Medicaid according to data in the 2011 V.I. executive budget. To qualify, a family’s income had to be extremely low. Total funding was just under $15 million in 2009.

In 2015, after the ACA and Medicaid expansion took effect, the USVI had 18,000 people in the program, according to Medicaid’s website.

In early 2018, responding to the 2017 hurricanes, Congress approved $106.9 million in Medicaid funding for the territory and temporarily waived the matching requirement. If it meets certain milestones, the territory could get an additional $35.6 million.

As a result, in June of this year 29,013 Virgin Islanders were getting Medicaid, Human Services Commissioner Kimberley Causey-Gomez told senators in budget testimony.

The 2019 budget had $86 million for the Health and Human Services from the 2018 congressional approval and well over $100 million in total Medicaid funding.

If Congress does not enact legislation to increase the amount of Medicaid funding and increase the FMAP, the USVI will return to a 45 percent local match and local Medicaid funding will be capped at $18.7 million. Total Medicaid funding would be around $65 million with $49.6 million for the territory’s regular Medical Assistance Program, another $9.4 million for children’s health insurance and several million for other costs.

The congressional bill tracking service GovTrack cites a Skopos Labs estimate that the earlier version of the Grassley-Wyden bill had a 10 percent chance of being enacted in the current Congress. Skopos predicts the likelihood of passage with a computer algorithm that takes into account factors that have been statistically associated with the likelihood of passage, such as what state its from, what party and what the general subject is. But Skopos Labs may be wrong, since “correlation is not causation,” as it says on its explanation. Also, this is a new version, not yet scored. And bipartisan statements of support in the Senate for the new version, plus apparent support from the president mean a lot.