Sponsors (5)
The bill substantially increases federal support and transparency for Medicaid, Medicare DSH, and potential premium assistance in U.S. territories—potentially expanding coverage and shoring up hospital revenue—at the cost of materially higher federal spending, implementation complexity, and uneven effects that could leave some hospitals (especially in Puerto Rico) worse off.
Medicaid-eligible residents in Puerto Rico, the U.S. Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa gain access to uncapped federal Medicaid funding beginning FY2026 plus a $300 million DSH allotment pool, which can expand coverage and increase hospital support for uncompensated care in the territories.
Hospitals in U.S. territories can receive higher or more-stable Medicare DSH payments through rebasing and comparator rules (including use of FY2017 cost period for 2025–2030), improving revenue stability for local health systems.
Certain territory Medicaid enrollees will be treated as eligible for Part D low-income subsidies beginning in 2026, expanding prescription drug subsidy eligibility and lowering out‑of‑pocket drug costs for enrollees in the territories.
Federal taxpayers will likely face significantly higher federal spending because territorial FMAP/funding ceilings and limits are removed and the bill contemplates Exchange-like premium tax credits for territories, increasing federal outlays and potential deficits.
Hospitals in Puerto Rico are likely to see reduced DSH payments due to narrowing the DSH numerator to only Part A‑entitled patient days, which could force service cuts, longer waits, or higher out-of-pocket costs for patients on the island.
Providers and territorial administrations may face substantial transitional administrative and capacity burdens—plus tight implementation deadlines—that could disrupt care delivery or lead to rushed/incomplete program designs.
Based on analysis of 6 sections of legislative text.
Removes Medicaid funding caps for U.S. territories, creates territory DSH allotments ($300M FY2026), revises Medicare DSH rules for Puerto Rico, and requires expanded CMS reporting.
Introduced December 5, 2025 by Stacey E. Plaskett · Last progress December 5, 2025
Removes certain Medicaid funding limits that have restricted federal matching and payments for Puerto Rico, Guam, the U.S. Virgin Islands, the Northern Mariana Islands, and American Samoa beginning fiscal year 2026; creates dedicated Medicaid DSH allotments for those territories (a $300 million pool in FY2026 allocated pro rata by low‑income/uninsured population); changes how Medicare DSH payments are calculated for Puerto Rico hospitals and establishes a rebasing option for territory hospitals starting for cost reporting periods beginning Oct 1, 2025. Requires HHS to publish detailed Medicaid/CHIP data for each territory within 180 days and to deliver a report to Congress by Feb 1, 2026 on the impacts of excluding territories from ACA exchange subsidies and participation rules.