Medicaid operates in the five U.S. territories: American Samoa, the Commonwealth of the Northern Mariana Islands, Guam, Puerto Rico, and the U.S. Virgin Islands. Unlike state Medicaid programs, financing for territorial Medicaid programs is capped, meaning territories can only access federal funds up to an annual ceiling. Additionally, although the federal matching rate for states is based on per capita income and ranges from 50 to 76 percent, the rate for the territories is set by statute at 55 percent.
Because this financing structure has been insufficient to fund Medicaid in the territories, Congress has provided time-limited increases to supplement Medicaid but all sources of supplemental funding will expire in 2019. If Congress does not appropriate additional resources in 2020, the territories will be compelled to fund Medicaid entirely with unmatched local funds, cut services or eligibility, or implement a combination thereof.
This issue brief provides background on the sources of federal funds for each territory, data on their remaining federal Medicaid funds, estimates when territories are expected to run out of funds, the amount of shortfall they will face, and the amount of expiring funds that will go unspent.
