H.R. 6494: Territories Health Equity Act of 2025

This legislation, known as the Territories Health Equity Act of 2025, aims to improve healthcare funding and access for U.S. territories under the Medicare and Medicaid programs. Here’s a breakdown of the main provisions:

Title I—Medicaid

Section 101: Elimination of Medicaid Funding Limitations

This section removes limitations on general Medicaid funding for Puerto Rico, the Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa. These funding restrictions will cease starting fiscal year 2026, allowing these territories to receive more substantial Medicaid support.

Section 102: Federal Medical Assistance Percentage Limitations

This section eliminates specific limitations on the Federal Medical Assistance Percentage (FMAP) for Puerto Rico, enabling it to receive a more equitable share of federal Medicaid funding consistent with the other states starting in fiscal year 2026.

Section 103: Disproportionate Share Hospital (DSH) Allotments

This allows territories to access Medicaid DSH funds, which support hospitals that serve a large number of low-income patients. For fiscal year 2026, these allotments will be allocated based on the low-income or uninsured population in each territory.

Title II—Medicare

Subtitle A—Part A

Section 201: Medicare DSH Payments

This section amends calculations of Medicare DSH payments specifically for hospitals in Puerto Rico, ensuring they receive fair compensation for serving high numbers of low-income patients.

Section 202: Rebasing Target Amount for Hospitals

This provision allows for the adjustment of payment bases for hospitals in territories, ensuring their reimbursement reflects more accurate and updated financial realities starting from October 2025.

Section 203: Medicare DSH Target Adjustments

This ensures that hospitals in the territories receive adjusted payments if they admit a high percentage of low-income patients, supporting healthcare for the underserved populations in these regions.

Subtitle B—Part B

Section 211: Elimination of Late Enrollment Penalties

For residents of Puerto Rico, this section removes penalties for late enrollment in Medicare Part B, easing access to needed healthcare services.

Subtitle C—Medicare Advantage (Part C)

Section 221: Adjustment in Benchmark Payments

This allows for adjusted benchmark payments for low-base payment counties in Puerto Rico, ensuring they receive fairer treatment in Medicare Advantage programs.

Subtitle D—Part D

Section 231: Automatic Eligibility for Subsidies

This section establishes automatic eligibility for certain low-income individuals living in U.S. territories to receive premium and cost-sharing subsidies under Medicare. It also proposes the sunset of a program that currently provides enhanced allocations for this purpose beginning in 2026.

Title III—Miscellaneous

Section 301: Transparency in Medicaid and CHIP

The Secretary of Health and Human Services is required to publish information about Medicaid and CHIP, including eligibility criteria and enrollment data for territories, in an effort to promote transparency.

Section 302: Reporting on Exchanges

This requires a report detailing the impacts of the exclusion of U.S. territories from health insurance exchanges established under the Affordable Care Act, focusing on access to coverage for residents.

Section 303: Coverage Access for Uninsured Individuals

This provision mandates the establishment of a mechanism ensuring access to health insurance coverage for individuals in U.S. territories where no qualified health plans are available through federal exchanges.

Relevant Companies

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