Delegate to Congress Stacey Plaskett on Wednesday again called for equitable treatment of United States territories when it comes to healthcare funding, announcing that she is reintroducing the Territories Equitable Health Act that seeks to lift the cap on the federal Medicaid match that exists only for U.S. territories.
“This has been an issue for decades. It has become an even more significant issue in the aftermath of the natural disasters that the territories have all experienced in the past two years,” Plaskett told reporters at a press conference in Washington.
In the Virgin Islands, even though residents pay the same taxes for Medicaid, Medicare and Social Security as employees anywhere in the country, federal law has set a cap on the federal match for Medicaid payments at 55 percent. Federal Medicaid match in the 50 states and Washington D.C., however, are open-ended; these jurisdictions enjoy a federal match from 50 percent up to 81 percent for the poorest states.
“That is not fair. It is not within parity, and it is not equitable,” Plaskett said. “This is a fundamental underlying problem that the territories have: a limited federal medical assistance percentage, in addition to a cap on overall funding.”
The Medicaid funding cap for the territories means once the cap is reached, the territories must bear the full cost of Medicaid services.
“The caps are antithetical to the purpose of the program, to be able to expand and contract based on local need,” Plaskett said.
Rep. Jenniffer Gonzalez-Colon (R-PR), who stood beside Plaskett at the press conference, said Puerto Rico is suffering from the same restrictions, with Medicaid federal match capped at 55 percent even though 45 percent of Puerto Rico’s population falls below the poverty threshold, compared with Mississippi’s 21 percent.
The situation was worse before the Obama-era Affordable Care Act. In 2005, the U.S. General Accounting Office found that the territories only received about $50 per capita in Medicaid funding, while states received $800 per capita. The Affordable Care Act provided supplemental funding for the territories starting July 2011, according to Plaskett, which also allowed for the increase of funding from 55 percent to 100 percent in the aftermath of Hurricanes Irma and Maria. That support, which is crucial, according to Plaskett, expires in September 2019.
In the case of Puerto Rico, the territory received a direct allocation of $3.8 billion dollars that resulted in 100 percent of federal cost share for Medicaid and Medicare services, but that also ends in September 2019.
“If we are not addressing [that] in this kind of bill, we’re going to have, in the 2020 budget, a lot of federal funding [that] will revert statutorily to the cap of 55 percent,” said Gonzalez. “That’s the reason we need to fix, in the long term solution, this situation with federal medical assistance percentage.”
The low rate of federal matching funds is arbitrary, according to Plaskett, and has forced the government of the Virgin Islands to spend more local Medicaid dollars than a state would. The 55 percent local match also meant keeping the Medicaid eligibility rolls down, setting unrealistic income requirements that exclude individuals who would have qualified for Medicaid in states. This results in residents of territories moving to states that can provide better for their healthcare needs.
“Before the 2017 hurricane season, a state-like FMAP alone, if we had been treated in the similar manner as the states, it would have provided the government hospitals in the Virgin Islands approximately $22 million per year in local matching funds and would have reduced the uncompensated care costs, and subsidized the local treasury,” Plaskett said.
Plaskett said the effects of the low federal match were seen after the 2017 hurricanes, when hospitals were destroyed because “hospital administrators have to make the decision between putting a new roof on, supplementing, or paying doctors and nurses and healthcare individuals.”
In addition, Plaskett said, even before the storm, the territory’s two hospitals — Schneider Regional Medical Center on St. Thomas and Juan Luis Hospital on St. Croix — were excluded from the Medicaid Disproportionate Share for Hospitals program, or DSH, in spite of the significant amount of uncompensated care.
Plaskett’s legislation, HR 1354 or “The Territories Health Equity Act of 2019,” with support from representatives from other territories, aims to lift the Medicaid caps and provide for fair inclusion of the territories in Medicaid, Plaskett said.
The Territories Health Equity legislation would also address low hospital payments under Part A.
Hospitals in the Virgin Islands receive Medicare compensation under Part A through a system using what Plaskett calls out-of-date reimbursement formulas. Payments to the two hospitals are based on 1982 and 1996 costs, annually adjusted for inflation, but due to the large permanent changes in services, Plaskett said, the cost of care at both hospitals is not comparable to the inflation-adjusted expenses of their base year.
The legislation would also include small territories in the Medicaid DSH program, Plaskett said, improve the treatment of territories under Medicare Part D, or its low-income subsidy programs.
“We must confront the difficult reality that these territories and citizens and residents have [been] neglected and allowed to fall behind. This bill attempts to bring parity of Medicaid services,” Plaskett.
Rep. Darren Soto (D-FL), who arrived later in the press conference to show support for the bill, has been “a champion and huge supporter” of U.S. territories, according to Plaskett, particularly of Puerto Rico and the USVI. After the 2017 hurricanes, Soto was one of the first people to step forward and offer support to the two Caribbean territories, she said.
“We cannot overlook health care equality in our nations’ territories as well,” said Sotto, pointing to the cultural and economic connections his state has with Puerto and the Virgin Islands.
“We take no enjoyment in knowing that there has been an exodus of doctors from Puerto Rico to Florida. We want Puerto Rico, we want the Virgin Islands to succeed and that means we have to have a well-funded system that has topnotch hospitals, that has access to healthcare, that creates a system where doctors want to continue to practice in the Virgin Islands…in Puerto Rico,” Soto said.
As for bipartisan support and the bill’s prospects for passage, Plaskett said many members of Congress from both sides of the aisle support the bill, including members of Congress representing districts in New York, Florida and Texas that have many constituents from the U.S. territories. Soto is a member of the committee of primary jurisdiction for the bill, the Committee of Energy and Commerce. Plaskett said she has also had conversations with Committee Chairman Rep. Frank Pallone (D-NJ) and Rep. Diana Degette (D-CO), who chairs the Subcommittee on Oversight and Investigation under the Committee on Energy and Commerce.