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Gov. Lolo: Territories cannot afford any reduction in Medicaid funding

Gov. Lolo Matalasi Moliga has called on the Trump Administration and the U.S. Congress to be mindful that small economies such as those of American Samoa and other U.S. territories “cannot afford any reduction in Medicaid” funding.

Lolo made the call in his written official address distributed at last Friday’s annual meeting of the federal Interagency Group on Insular Areas (IGIA) in Washington D.C. where the governor also made an oral presentation. The meeting focused on health care and debt service priorities.

At the outset of his statement, the governor points out that the territories are often overlooked when federal policy makers create laws, policies and programs that “are supposed to help our unique native communities.”

However, he said often times, “such initiatives ignore our remote distance, vulnerable economies and complex social structures.”

“Usually they fail to resolve the problems needing solutions or end up complicating already difficult environments and stifling our ability to grow our economies and our communities overall,” Lolo said.

On health care, the governor explained Medicaid is the primary health insurance coverage for the people of American Samoa — other then Tricare and Medicare. He noted that American Samoa has been cited as having one of the highest rates of obesity, diabetes and non-communicable diseases in the world.

With only one Medicaid/Medicare acute care hospital provider, which does not have many diagnostic services or medical specialists, many local patients require off island medical referral, the governor explained.

And the absence of off-island referral services or quality health care, means that those who cannot make it to the U.S. for medical care “simply accept the inevitability of death,” Lolo points out and asked the question, “How can this be acceptable to the most powerful and wealthiest nation in the world?”

“Our people are U.S. nationals that give their lives for this country,” Lolo declared. “Per capita, we send most of our children to the U.S. military. Do not the families of our children deserve access to heath care similar to the other 50 states in the nation?”

While pleased that U.S Donald Trump has prioritized health care issues in his administration, Lolo said he is “wary of how [the] administration is going to approach the repeal of or substantive reforms” of the Affordable Care Act (ACA — also known as the Obamacare), Medicare and Medicaid.

The governor explained that the ACA didn’t impact American Samoa like all other territories and states, for the simple reason — American Samoa does not have health insurance providers nor did it need Medicaid expansion.

He explained that the Medicaid program for American Samoa does not enroll beneficiaries because it presumes that all U.S nationals are eligible beneficiaries. “Further, no insurance companies have wanted to provide health insurance to our people because of the high poverty level, low volume purchasers and high health care risk,” he said.

Since its creation in 1985, Lolo said the federal Medicaid has been the only health insurance provider for the people of American Samoa. He then revealed that it was last year that a health insurance provider began to pilot a basic plan in American Samoa, paid for by one semi-government agency, “but how long it can be sustained remains to be seen.”

“We certainly cannot afford it for the rest of the government nor the people of the territory,” said Lolo who didn’t identify the name of the one semi-government agency.

Since taking office in 2013, Lolo said his staff has worked closely with the U.S Center for Medicaid and Medicare Service to improve the way the territory administers the Medicaid program. And in that time, “we have also come to learn about the shortcomings of our Medicaid program as a function of the federal law that created it for the territories,” he said.

For example, in American Samoa, there is a waiver — similar to the Northern Mariana Islands, which waives federal requirements stemming from any provisions in the Social Security law. However, he said there are three provisions, that cannot be waived — the Medicaid cap; the federal matching percentage; and mandatory health services.

“These three provisions are the devil in the details,” he said. “On the one hand, we are mandated to provide certain medical services that amount to millions of dollars, yet our annual Medicaid funding is capped currently at $12 million for 2017.”

(Samoa News notes that the Lolo Administration along with Congresswoman Aumua Amata have been working to remove the Medicaid cap.)

“To compound the inadequacy of this funding,” Lolo, said the territories “are unfairly treated with the application of the 55%/ 45% match that we struggle to make because of our poor economies.” He believes the 55% matching rate is an arbitrary number as it is not a result of using the standard calculation that applies to all states based on average per capita income.

For example, in the poorest states like Mississippi and Kentucky, with poverty rates of 22% and 19% respectively, they have a matching percentage of 74% and 70%. For wealthy states like Connecticut and Wyoming with poverty rates of 10%, their matching is 50%. However, he says American Samoa’s poverty rate is 65%.

“Our poverty level is substantially higher than the poorest states in the nation, yet we are subject to a burdensome 55% (match) similarly applied to the wealthiest states in the nation,” he said.

Lolo said the three conflicting statutory provisions “created long-standing chronic funding shortages and barriers to access health care for our people”.

The governor offered two solutions: the federal government apply the average per capital formula used by the states to the territories to assist the territories with the matching percentage and second, Congress must lift the statutory cap on the territories or significantly increase it to allow the territories to adequately cover the unfunded mandates in the law.

Regarding the move by Trump and the Republican controlled Congress to repeal Obamacare, Lolo said he won’t even ask to extend the ACA’s cliffhanger deadline of 2019 that would terminate the territories ACA Medicaid funding.

Instead, Lolo implored the Trump administration and Congress to “work together” and “to please be mindful that for small economies like ours, we cannot afford any reduction in Medicaid.”

However, Lolo is supportive of any efforts to give the territories a block grant for Medicaid, “so long as the block grant is determined in an evidence-based manner to ensure that our people are not negatively impacted.”

“The block grant must be significant with a steady annual increase to account for the increase in the cost of doing business,” he added. (Samoa News will report in later editions of other issues cited in the governor’s written statement.)