Medicaid Improvement for Insular Areas Act of 2025
Medicaid Improvement for Insular Areas Act of 2025 would remove the general Medicaid funding cap (the “CAP”) that applies to U.S. territories — Puerto Rico, the Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa — starting in fiscal year 2025. The bill amends the Social Security Act to ensure the cap does not apply to these territories and makes conforming changes to related provisions so the CAP is no longer referenced. In practical terms, this means federal Medicaid funding for territories would no longer be subject to the statutory funding ceiling imposed by the CAP; instead, funding would be governed by the standard Medicaid program framework going forward. The bill does not modify the underlying Medicaid matching rates (FMAP) themselves, but it removes the cap that previously limited total federal funds to territories.
Key Points
- 1Eliminates the general Medicaid funding cap (CAP) for Puerto Rico, the Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa beginning in fiscal year 2025.
- 2Adds a new subsection (j) to Section 1108 of the Social Security Act to codify the sunset of the CAP for these territories starting in FY2025.
- 3Makes conforming amendments removing references to the CAP from other sections of the Social Security Act (notably sections 1902(j) and 1903(u)).
- 4Effective date: changes apply beginning with fiscal year 2025.
- 5The bill’s title suggests broader purposes, but the text provided focuses on eliminating the CAP; no other specific programmatic changes are detailed in the bill’s text.