Mr. Speaker, I rise this morning to address a particular provision included in Title VI of S. 1932, the Deficit Reduction Act of 2005. This provision, Section 6055, is very important to my district, to my constituency, and to the Members…
Mr. Speaker, I rise this morning to address a particular provision included in Title VI of S. 1932, the Deficit Reduction Act of 2005. This provision, Section 6055, is very important to my district, to my constituency, and to the Members of this body who represent one of the U.S. territories. Over the past two years, since arriving in Congress, I have worked to address the serious concern relating to the application of the Medicaid program to Guam and the other U.S. territories vis-a-vis the application to the 50 States.
In the 50 States, Medicaid is an individual entitlement. There are no limits on the Federal payments for Medicaid in the 50 States as long as the state is able to contribute its share of matching funds. However, annual Federal Medicaid payments in Guam and in the other U.S. territories are subject to different rules and may not exceed a certain amount specified in law. These limitations are set under Section 1108 of the Social Security Act (42 U.S.C. 1308(g)).
The reality is that Medicaid claims and expenditures in Guam and in the other U.S. territories exceed the limited amounts or ceilings set in U.S. law. Even if the Government of Guam is financially prepared, able and willing to meet its share of the matching requirement, U.S. law will not allow for Federal Medicaid payments to be made beyond the specified limit. Fortunately, to account for inflation, the law was previously amended to provide for increases beginning in 1999 to the ceilings based on the annual percentage change in the medical care component of the Consumer Price Index. Indexing the ceilings for inflation was a needed and important improvement in the Medicaid program for the U.S. territories. However, even with the inflation indexing, the ceilings provided for in current law fall far short of meeting actual Medicaid-eligible claims in the territories.
Apart from the fundamental and more inherent issues associated with the disparate treatment of the territories in this entitlement program, are the practical and public health problems caused by the seemingly arbitrary and budget-driven federal funding limitations placed on the territories. Medicaid is an important Federal safety net and it is essential that the program be operated efficiently and to the fullest extent needed in the territories.
I am pleased that the Senate receded to the House position and accepted Section 3141 of H.R. 4241, the House version of this budget reconciliation legislation, in the conference committee. This provision will provide for adjustments to the Medicaid payments for the U.S. territories under Section 1108 of the Social Security Act. These Medicaid adjustments address critical health care needs in the territories.
Specifically, Section 6055, as included in the conference report, will provide annual increases for Fiscal Years 2006 and 2007 in the ceilings placed on Federal funding for the Medicaid program in Guam, the Virgin Islands, American Samoa, the Commonwealth of the Northern Mariana Islands, and Puerto Rico. The total adjustment for all territories in Fiscal Year 2006 is $20 million and in Fiscal Year 2007 the adjustment is $28 million. For Fiscal Year 2008 and subsequent fiscal years, the funding for the Medicaid program in the territories will be calculated by increasing the Fiscal Year 2007 amount by the percentage change in the medical care component of the Consumer Price Index, in the same manner as currently provided in law. The Congressional Budget Office has estimated that these adjustments will amount to additional $140 million in Medicaid payments for the territories over the next five years, and $323 million over the next ten years.
This provision has been included in this conference report as a result of bipartisan negotiations. On September 8 and 9, 2004, in the 108th Congress, I offered an amendment to H.R. 5006, the Departments of Labor, Health and Human Services, and Education, and Related Agencies Appropriations Act for Fiscal Year 2005 that would have provided an additional $8 million in Medicaid funding that year for Guam, the Virgin Islands, American Samoa, and the Commonwealth of the Northern Mariana Islands. A point of order was raised and sustained on the amendment the first time it was offered. However, a modified and second amendment filed to the bill for the same purpose, was debated the following day. This amendment led to a serious and direct discussion for the first time on the House floor on the issue of Medicaid payments to the territories. Ultimately, I withdrew the amendment at the request of the gentleman from Texas, Mr. Barton, who pledged to work with me, my colleagues from the territories, and the gentleman from Indiana, Mr. Burton, on this issue. The gentleman from Texas, Mr. Barton, the Chairman of the House Committee on Energy and Commerce, kept his word. The gentleman and his professional staff and counsel have worked patiently and diligently with us to address this issue.
The language included in Section 6055 of S. 1932 is a result of this close collaboration and cooperation. I want to thank the gentleman from Texas, Mr. Barton, the gentleman from Indiana, Mr. Burton, who has been an ally and leader on this issue, and the leadership of the budget committees, for their work on this provision.
In the case of Guam, the adjustment made to the ceiling by this bill will bring the Federal Government, closer to meeting the actual amount of recent annual Medicaid costs. This is especially the case when factoring in Federal grants received under mandatory appropriations made for annual Compact-impact assistance. Guam currently receives $14.2 million every year from the Department of the Interior to defray costs incurred as a result of increased demands placed on health and social services due to the residence in Guam of citizens of the Freely Associated States. This funding was authorized by the Compact of Free Association Amendments Act of 2003 (Public Law 108-188).
However, despite the adjustments made to the ceilings set under Section 1108 of the Social Security Act by this bill, a significant and outstanding issue remains with respect to the application of the Medicaid program in Guam and the other U.S. territories. The Federal Medicaid matching rate, which determines the share of Medicaid expenditures paid for by the Federal Government, is statutorily set at 50 percent for the territories (42 U.S.C. 1396d(b)(2)). However, a formula is used to determine the matching rate for the States. If qualified for the formula the territories would receive rates as high as 77 percent. I hope that at some point in the future the rate for the territories could be set by the same formula as used for the states or at minimum adjusted to be on par with the rate statutorily set for the District of Columbia.
With the increase in Medicaid payment authorization provided by this legislation, the territories can more effectively address health care needs within the fiscal constraints of the Medicaid program. As has been stated, the Medicaid program in the territories is significantly different from the program in the states, and these differences present unique challenges to the territorial governments.
I thank the conferees for their attention to and acceptance of this important provision for the territories. This adjustment to Federal funding for Medicaid in the territories will have a significant impact in helping to address health care disparities between the states and the territories. I look forward to continuing to work with my colleagues from the territories, and the leadership of both chambers, to effectively address and eliminate disparities in federal health care financing between the states and the territories.