Thousands of residents who rely on Medicaid could see a reduction in health care funding for medical needs unless more funds are made available, via a cap increase or a federal cost share increase.
As of August 2017, 35,559 people, or 21% of Guam’s population, were enrolled in Medicaid or Children’s Health Insurance Program, according to a July 2019 Report to Congress.
Guam received about $268 million under the Patient Protection and Affordable Care Act of 2010, or ACA, which increased the government of Guam’s ability under Medicaid to help pay for the health needs of primarily the island’s poorest – those without health insurance or ability to pay for health care.
“Our expenditure for this year was more than $145 million, almost $150 million, for Medicaid,” Tess Arcangel, the administrator of the Department of Public Health and Social Services Division of Public Welfare, said last month. Most of that was in federal funds made available through the ACA, which expired Sept. 30.
However, only $15.47 million in federal funds will be available in the new fiscal year, according to the fiscal 2020 budget. The fiscal year began Oct. 1. And even with local matching funds added, falls far short of the expressed need in fiscal 2020.
Arcangel said as the ACA expires and the Medicaid cap, which Gov. Lou Leon Guerrero and governors before her have asked to be lifted, comes back into play, GovGuam will be left with a huge chunk of the liability of health care costs for the island’s uninsured or underinsured population.
Arcangel said Guam’s cap for Medicaid alone, not including CHIP, is at $18.38 million.
A July 2019 Congressional Research Service report noted that “Once the cap is reached, the territories assume the full cost of Medicaid services or, in some instances, may suspend services or cease payments to providers until the next fiscal year.”
Affordable Care Act
The ACA provided for a temporary increase in Medicaid funding beyond the Medicaid cap. And with the passage of the disaster relief fund earlier this year, Guam was able to access about $45 million of the remaining ACA funds without having to pay a local match.
But even that will provide little help as only about $100,000 remained – barely enough to pay for Medicaid costs until the newly approved November deadline.
“There was another bill in Congress to lift the cap and make other changes … but it was shelved as far as I have seen,” Arcangel said.
Without federal legislation to lift the cap and with local payments exceeding $145 million in fiscal 2019, GovGuam’s liability in terms of helping those without insurance soars.
“And even removing the insurance for children under CHIP,” which Arcangel said falls under Medicaid but has a budget separated out from Medicaid, “the local liability for the government will be about $85 million for the new fiscal year.”
According to the fiscal 2020 budget, the following is appropriated to DPHSS for:
• MIP: $4.35 million
• Medicaid Program: $7.95 million from fiscal 2020 revenues — $3.67 million from the Healthy Futures Fund and $4.28 million from the General Fund — as the local match for the federal grants. An additional $6 million from the fund balance of Healthy Futures Funds from fiscal 2018 also was appropriated.
• Children’s Health Insurance Program: $4.92 million from the General Fund as the local match for the $19.66 million for federal matching grants.
Arcangel said those who can no longer receive assistance through Medicaid because of the reduction in funds will likely apply to the fully locally funded Medically Indigent Program.
“And they are all eligible under MIP,” she said, because of the income levels. And that’s perhaps more problematic considering the funding levels for MIP are less than half that of Medicaid. “Whether you put them under Medicaid or you put them under MIP, it’s the same local funding. So technically if they don’t give us funding it’s still government liability.”
Providers will be informed
Arcangel said, with the changes to Medicaid, DPHSS will have to inform providers that funding will be limited. She stopped short of saying that some local clinics may no longer accept Medicaid for this reason, although this has occurred in the past.
“However, the clients can go to DPHSS (in Mangilao), or to the Northern or Southern Clinics, and, of course, the Guam Memorial Hospital,” she said.
The Affordable Care Act “really saved the government since it started because the extra funding helped more people,” which is notable, considering that the cost of health care overall is increasing, she said.
“We have new technology, new treatment, and even new medication,” she said. “But the cost of all of this; for example, hepatitis and HIV, all of it is very new medication — so it’s very expensive medication.”
“But hopefully, they’ll provide some relief,” she said, noting “they” refers to the federal government. “If they increase FMAP (Federal Medical Assistance Percentage program) or remove the cap, that will help.”
Writing for help
The five U.S. territories – Guam, American Samoa, The Commonwealth of the Northern Mariana Islands, Puerto Rico and the U.S. Virgin Islands – all have the same FMAP rate of 55%, according to the Congressional Research Service. By contrast, the FMAP for the 50 states and D.C. varies by state, according to each state’s per capita income and can range from 50% to 83%, which means the local funding required to access Medicaid is less than that paid by the territories.
Additionally, federal Medicaid funding to the states and D.C. is open-ended, but the Medicaid programs in the territories are subject to annual federal capped funding, the report states.
Gov. Leon Guerrero has asked, in a letter sent directly to Senate Majority Leader Mitch McConnell, for parity.
“I must ask Congress to fully address this inequality between the territories and the states by calculating the Medicaid reimbursement rate in the same way for all," the governor wrote to McConnell.
Additionally, the governor signed a joint letter with other territorial governors, asking for parity.
“As the chief executives of our respective territories, we urge Congress to provide the U.S. territories with the same need-based Medicaid funding that is currently available to the 50 states and the District of Columbia. Doing so will ensure that the U.S. citizens residing in the territories will be eligible for fair, equitable health care coverage, putting all Americans on an equal footing,” the joint letter stated.
They also noted that doing so will:
• eliminate the arbitrary cap on annual federal Medicaid funding;
• increase the federal matching rate for the territories’ Medicaid expenditures;
• update hospital reimbursements; and
• increase funding for prescription drug coverage to low-income seniors.