The Covid-19 pandemic in U.S. Pacific territories drove up unemployment, halted tourism economies and prevented families from going home. But it also brought a much-needed influx of federal funding that local officials say helped island governments provide more health care services.

Now, some of that funding will be permanent. On Thursday, President Joe Biden signed the $1.7 trillion budget bill.

The bill preserves a federal Medicaid funding match of 83% for all three U.S. Pacific island territories — Guam, American Samoa and the Northern Mariana Islands — as well as the U.S. Virgin Islands, and extends Puerto Rico’s 76% rate for another five years.

It’s a critical victory for lawmakers and advocates who have been pushing to preserve higher Medicaid funding rates that Congress enacted during the first two years of the pandemic. One American Samoan official said she expects the funding will allow the territory to expand cancer treatment options for patients.

The Medicaid office on Saipan set up picnic tables outside to help manage the crowds of people who have signed up for the public health insurance program. On Tuesday Aug. 16, the office is closed to the public after 1 p.m. so the tables are empty.
The Medicaid office in the Northern Mariana Islands posts signs to manage the crowds of people who have signed up for the public health insurance program. Carlo Domingo/Civil Beat/2022

Medicaid is a public health insurance program that serves low-income individuals and families. It provides valuable health care coverage for people who may not get access to health insurance through work or wouldn’t otherwise be able to pay for their own premiums on the insurance marketplace.

That includes a large swath of people who live in U.S. territories, where health care infrastructure is limited and health care staff shortages are the norm. Families often find themselves flying to Hawaii or other places for health care they can’t get at home.

“We want to reduce our reliance on off-island care,” said Sandra King Young, who leads Medicaid services in American Samoa,. “We want to build our local capacity to care for our people. It’s better for our families, they don’t have to be displaced to get medical treatment off island.”

Territory Funding Caps

King Young thinks the prior arrangement effectively treated U.S. territories like much wealthier states.

In U.S. states, the federal matching percentage for Medicaid changes according to the state’s per capita income, according to analysis by the Kaiser Family Foundation. U.S. territories, however, were treated differently and subject to the fixed federal match of 55% and statutory funding caps.

That’s despite relatively high poverty rates in U.S. territories. In 2019 when the 55% matching rate for U.S. territories was in place, Hawaii’s federal matching percentage for Medicaid funds was about 54%. That year, 6.4% of Hawaii families lived below the federal poverty level according to the American Community Survey.

By comparison in American Samoa 50% of all families lived under the poverty level that year. In the Northern Mariana Islands, it was 33%, and on Guam, the family poverty rate was 16.8%. King Young says the 83% Medicaid fund match, the maximum permitted under statute, brings American Samoa more in line with mainland states like Mississippi that similarly have above average poverty rates.

The bill also requires territorial governments to submit a four-year strategic plan to the federal government by the end of September and includes funding to improve Medicaid data systems in the Northern Mariana Islands, Guam, U.S. Virgin Islands and American Samoa.

More Money for Cancer Treatment

Gov. Lou Leon Guerrero from Guam said in a press release that the money will help Guam treat more Medicaid recipients and expand Medicaid services.

“This bill will help us provide greater access to health care and critical health services to those in our community most in-need,” she said.

In American Samoa, King Young says that cancer patients in particular will benefit from the increased funding. Right now, Medicaid patients who need cancer treatment must pay their own way to get care, often requiring a flight to New Zealand.

The territory can sometimes cover diagnostic work for cancer or pay to send a Medicaid patient to New Zealand for diagnosis but if it turns out they have cancer, “then we stop the coverage,” Young said. “Then the patient is on their own.”

King Young thinks that will change with the higher federal matching percentage.

“We intend to start covering cancer treatment and cancer patients,” she said. The Northern Mariana Islands has also used the increase in federal funding during the pandemic to establish oncology services in the island’s only hospital where about 70% of patients rely on Medicaid.

U.S. Rep. Gregorio Sablan from the Northern Marianas said in his e-newsletter that increasing the federal Medicaid match has been a goal of his since taking office more than a decade ago.

“Without today’s spending bill the federal share would drop to 55%, costing the Commonwealth an estimated $40 million and threatening services at the Commonwealth Healthcare Corporation, which depends on Medicaid for 37% of revenue,” he said.

King Young from American Samoa noted that improving local access to oncology services is a long-term investment that will require planning and staffing resources.

“It’s not going to be fixed by just getting money,” she said.

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