Sponsors (5)
Introduced December 5, 2025 by Stacey E. Plaskett · Last progress December 5, 2025
The bill substantially expands federal support, subsidies, and payment protections for U.S. territories' health coverage and hospitals—improving affordability and financial stability there—while increasing federal spending and administrative complexity and creating uneven distributional effects that may require offsets or implementation resources.
Medicaid beneficiaries and hospitals in U.S. territories (Puerto Rico, U.S. Virgin Islands, Guam, Northern Mariana Islands, American Samoa) will receive increased and more predictable federal Medicaid and DSH support starting FY2026, improving coverage stability and hospitals' ability to cover uncompensated care.
Medicare payments in the territories — including higher Medicare DSH payments, rebased targets, and a guarantee that blended benchmarks are at least 80% of the national average — will increase revenue stability for territory hospitals and support Medicare Advantage availability and benefits for territory enrollees.
Eligible residents of U.S. territories will gain access to Exchange-like premium tax credits and cost‑sharing reductions (with Treasury payments to offset territory fiscal impacts), lowering out-of-pocket costs and improving affordability of private coverage.
Extending expanded Medicaid/DSH payments, higher Medicare benchmarks, Part D/MA subsidy expansions, and premium tax credits will materially increase federal outlays, adding to budgetary pressures and potential deficits that could require offsets or reallocation of federal resources.
Complex new payment formulas, rebasing, and cross-references will raise administrative burden and implementation costs for HHS/CMS, Treasury, OPM, territory governments, and hospitals, requiring staff time and potentially new funding for implementation and audits.
Rebasing and formula changes may advantage some hospitals (including certain territory hospitals) while disadvantaging others on the mainland, creating uneven effects and perceptions of unfairness in federal payment distribution.
Based on analysis of 6 sections of legislative text.
Removes territorial Medicaid funding caps, authorizes territory Medicaid DSH allotments, reforms Medicare DSH/IPPS rules for Puerto Rico hospitals, and requires HHS reporting and a coverage mechanism for areas lacking Exchange plans.
Removes long-standing federal Medicaid funding caps that have limited federal Medicaid financing for the five U.S. territories, authorizes Medicaid disproportionate share hospital (DSH) allotments for those territories, and changes Medicare DSH and IPPS rebasing rules to raise payments for Puerto Rico hospitals. It also requires HHS/CMS to publish detailed territory Medicaid/CHIP data, deliver a report on harms from territories’ exclusion from ACA exchange subsidies, and create a mechanism to provide coverage options where no exchange plans are available. Key payment changes take effect in fiscal year 2026 or for discharges/cost periods beginning October 1, 2025; reporting and posting deadlines occur within months of enactment.