Sponsors (5)
The bill significantly expands federal support, subsidies, and transparency for U.S. territories—potentially improving coverage and reducing out‑of‑pocket costs—while increasing federal spending, creating distributional winners and losers (notably risks to Puerto Rico hospitals), and imposing administrative and tax complexities during implementation.
Medicaid beneficiaries in U.S. territories (Puerto Rico, the Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa) gain access to uncapped federal Medicaid funding beginning FY2026, potentially expanding eligibility, covered services, and financial support for territorial Medicaid programs.
Residents of U.S. territories could become eligible for premium tax credits and reduced cost-sharing through an Exchange-like territorial mechanism (and Puerto Rico premium-credit clarifications), lowering out-of-pocket health care costs for uninsured and low-income residents.
Some territory Medicaid enrollees will be treated as eligible for Medicare Part D low-income subsidy-related benefits beginning in 2026, expanding prescription subsidy eligibility and reducing drug costs for eligible enrollees.
Federal taxpayers and the federal budget will likely face materially higher costs because territorial Medicaid funding ceilings and FMAP limits are removed and Exchange-like premium tax credits are extended or enabled for territories, increasing federal outlays and potential deficit pressure.
Many Puerto Rico hospitals are likely to receive lower DSH payments because the Puerto Rico DSH numerator is narrowed to Part A‑entitled patient days, which could lead to service cuts, longer waits, reduced capacity, or higher out-of-pocket costs for patients in Puerto Rico.
The bill creates administrative, tax, and implementation complexity—short deadlines for data posting and mechanism design, restrictions to prevent double-claiming of credits, and coordination needs for Treasury/IRS—which could strain territorial administrations, providers, insurers, and beneficiaries during rollout.
Based on analysis of 6 sections of legislative text.
Removes key Medicaid funding caps for U.S. territories, creates a $300M FY2026 territory DSH pool, revises Medicare DSH/rebasing rules for territory hospitals, and requires territory Medicaid/CHIP transparency and an Exchange access report.
Official title: To amend titles XVIII and XIX of the Social Security Act to make improvements to the treatment of the United States territories under the Medicare and Medicaid programs, and for other purposes.
Introduced December 5, 2025 by Stacey E. Plaskett · Last progress December 5, 2025
Removes several statutory Medicaid funding caps and certain FMAP limits that have excluded or limited federal Medicaid funding for the five U.S. territories (Puerto Rico, U.S. Virgin Islands, Guam, Northern Mariana Islands, and American Samoa) beginning in fiscal year 2026; creates a $300 million territory DSH allotment pool for FY2026 and makes territories eligible for ongoing territory DSH increases. It also narrows how Puerto Rico hospital DSH adjustments are calculated and creates a rebasing "target amount" mechanism for Medicare payments to territory hospitals beginning for cost reporting periods on or after October 1, 2025. The bill requires HHS to publish territory-specific Medicaid/CHIP operational data within 180 days and to report to Congress by February 1, 2026 on how exclusion from ACA Exchange assistance has affected territory residents, and it adds a statutory provision (text not included here) aimed at access to Exchange coverage where plans are unavailable.