Territories Health Equity Act of 2025

Elimination of Medicaid Funding Caps: The bill removes general Medicaid funding limitations for Puerto Rico, the Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa, effective fiscal year 2026 (Section 101).

Improved Medicaid DSH Allotments: The bill permits Medicaid DSH allotments for territories, establishing a specific ratio for fiscal year 2026 based on the number of low-income or uninsured individuals (Section 103).

Adjusted Medicare Payments for Puerto Rico Hospitals: It changes the calculation of Medicare DSH payments for inpatient prospective payment system hospitals in Puerto Rico (Section 201).

Rebased Target Amounts for Territorial Hospitals: Hospitals in the territories will have a rebased target amount for payments, which may result in higher payment amounts (Section 202).

Increased Target Amounts for Certain Territory Hospitals: Hospitals in territories other than Puerto Rico may receive a target amount increase based on their disproportionate patient percentage (Section 203).

Elimination of Medicare Part B Penalties: Certain individuals residing in Puerto Rico will no longer face late enrollment penalties under Medicare Part B (Section 211).

Increased Medicare Advantage Benchmarks: The bill adjusts the benchmark for low-base payment counties in Puerto Rico (Section 221).

Automatic Subsidies for Low-Income Residents: Certain low-income territorial residents will gain automatic eligibility for premium and cost-sharing subsidies under the Medicare program (Section 231).

Access to Coverage via New Mechanisms: The bill establishes a mechanism to ensure individuals in territories without qualified health plans through an Exchange can access insurance coverage similar to the District of Columbia's Exchange (Section 303).

Sunset of Enhanced Allotment Program: The bill includes a sunset provision for the enhanced allotment program as of January 1, 2026 (Section 231).

Limitation on Medicare Advantage Benchmarks: The blended benchmark amount for territories is prohibited from exceeding the lowest blended benchmark amount for any area within the 50 States and the District of Columbia (Section 221).