Bill would end Medicaid funding caps for US territories starting 2026

What does this do?

This bill would eliminate fixed Medicaid funding caps and matching-rate limits for U.S. territories starting in 2026, letting them qualify for extra hospital payments (DSH) like states do. It also adjusts Medicare hospital payments, removes some Part B late-enrollment penalties in Puerto Rico, changes Medicare Advantage rates there, and expands automatic drug-cost help for low-income residents. It requires new spending reports and a study on territories' exclusion from ACA exchanges, and creates a way for residents without local exchange options to buy insurance through the D.C. exchange.

Who does it affect?

The bill mainly affects residents of Puerto Rico, the U.S. Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa, particularly low-income individuals, Medicare enrollees, and hospitals serving many low-income patients.

Why does it matter?

The changes would shift territories' Medicaid and Medicare funding structures closer to how states are treated, likely increasing federal health spending directed to these areas.

What does it cost, and who pays?

• Removes Medicaid funding caps
• Adds new DSH hospital payments
• Expands low-income drug subsidies