Pago Pago, AMERICAN SAMOA — Governor Pulaali'i Nikolao Pula has voiced concern over reductions to healthcare funding approved by the Fono in the Fiscal Year 2027 budget, warning that the cuts could significantly affect the Territory's ability to draw down federal funds and support essential medical services.

Speaking during his weekly press conference on Wednesday, the Governor addressed legislative reductions made to both the local Medicaid matching fund and the subsidy provided to the LBJ Tropical Medical Center.

Under the budget approved by the Fono, the local Medicaid match was reduced by 50 percent, from $6 million to $3 million, while the annual subsidy for LBJ Hospital was cut from $1.6 million to $1.2 million.

Governor Pulaali'i said he is particularly concerned about the reduction in Medicaid funding, noting that the local match serves as the foundation for securing much larger amounts of federal assistance.

According to the Governor, the $3 million reduction could result in the Territory forfeiting more than $9 million in federal Medicaid funding that would otherwise be available to support healthcare services for American Samoa residents.

He emphasized that Medicaid plays a critical role in funding healthcare services for low-income residents, senior citizens, people with disabilities, and individuals requiring long-term care and medical assistance. 

Governor Pulaali'i said it is important for the public to fully understand the real-world impact of the budget reductions approved by the Fono, particularly those affecting healthcare funding.

"The people deserve to hear what these cuts mean to their families," the Governor said, emphasizing that the consequences extend far beyond the dollar amounts appearing in the budget.

Explaining his concern over the reduction in the Medicaid local matching fund, Pulaali'i pointed out that every local dollar appropriated for Medicaid allows the Territory to draw down about two more dollars of federal funding. As a result, cuts to the local match have a multiplier effect, reducing not only local spending but also the federal funds available to support healthcare services.

According to the Governor, federal Medicaid funds cannot be accessed unless the American Samoa Government first provides its required matching contribution.

"You don't receive the federal money unless the local share is there first," the governor explained.

For that reason, he said the Fono's decision to reduce the Territory's Medicaid matching fund from $6 million to $3 million could have consequences far greater than the $3 million reduction itself.

"So cutting $3 million from the match does not take $3 million out of healthcare," Pulaali'i explained. "It really takes about $9.3 million out of healthcare, because $6.3 million in federal money that belongs to our people is left unclaimed. Here is what that looks like for our families. Local clinics and providers may wait a little longer to be paid, and some services may be disrupted. No new providers may be brought in, and off-island referrals are at risk. In 2024, off-island referrals were suspended for lack of funds. 

"Families who need specialty care that is not available here could face that again. New services that our people have been waiting for, including personal care services in homes and communities, cannot move forward. At LBJ, the $400,000 cut falls almost entirely on personnel and supplies, which is $9 out of every $10 the subsidy pays for. In addition, LBJ subsidy helps pay for the same off-island referral program. Our sickest, the ones that are struggling for care, are squeezed in from both sides."

When asked whether he was considering calling a special session of the Fono to discuss the budget cuts and their impact with legislative leaders, Governor Pulaali'i

"Perhaps I will," the Governor replied.

However, he stressed that such a decision would depend on the administration's ongoing assessment of how the budget reductions affect essential government services, particularly healthcare, as well as future discussions with Fono leadership.

According to Pulaali'i, the administration is currently reviewing the full impact of the funding cuts approved by lawmakers and evaluating whether additional legislative action may be necessary.

The Governor also reminded reporters that he had previously sought a special session of the Fono following this year's Flag Day celebrations. However, he said legislative leaders requested that any special session be postponed until after the lawmakers' recess.

Pulaali'i explained that when the Legislature reconvened, attention quickly shifted to the FY 2027 budget process.

"When the Fono came back, things happened so fast and the budget came," the Governor said. "I didn't want to shut government down."

Rather than risk delaying passage of the budget and disrupting government operations, he said he chose to exercise his constitutional line-item veto authority after the spending measure reached his desk.

"Instead, when it came to me, I line-item vetoed some of the things and sent it back to the Fono," Pulaali'i explained.

The Governor noted that he took that action on September 30 and said that since then communication with the Legislature regarding the budget and related funding concerns has been limited.

According to Pulaali'i, the only significant legislative action he has received from the Fono since that time was the bill addressing the American Samoa Government's longstanding debt to the American Samoa Government Employees Retirement Fund (ASGERF).

That measure seeks to convert the government's more than $30 million obligation to the Retirement Fund into a formal loan arrangement, with repayment assistance to be provided by the American Samoa Telecommunications Authority (ASTCA).