The Government Accountability Office (GAO), an independent, non-partisan, and investigative arm of Congress, released a report today that identifies multiple factors affecting federal financing of health care programs for Guam and the other U.S. territories. In 2004, Congresswoman Madeleine Z. Bordallo joined with 10 of her colleagues, including each of the Delegates representing the other territories, Congressman Dan Burton of Indiana, then Chairman of the House Human Rights and Wellness Subcommittee, and Congressman Robert Menendez of New Jersey, Chairman of the House Democratic Caucus, in requesting this study. GAO accepted their request and worked for over one year to identify the key federal programs that finance health services for the territories and to evaluate the extent to which the methods used by the Federal Government to allocate health funds to the territories differ from those methods used for allocating funds amongst the 50 States. Apart from fulfilling these two objectives, the GAO has also highlighted in their report differences found in spending levels per individual between the territories and the States.

The study found that federal health care financing programs – Medicare, Medicaid, and the State Children’s Health Insurance Program (SCHIP) – represented nearly 90 percent of the $2.2 billion in health care funding to the territories in Fiscal Year 2003, with Medicare alone representing over three-quarters of total funding. In Guam’s case, over half (56%) of the 2003 federal funds received were through Medicare; 29% was the result of grants awarded by the Department of Health and Human Services (HHS) and the Department of the Interior; 13% was received through Medicaid matching funds; and 2% was received through SCHIP.

“This study gives us a solid framework from which to tackle the funding issues relating to health care challenges unique to Guam and the territories. I am pleased with the thoroughness of the report. Data and information is key to improving health care in Guam. I will rely on this report as I continue my work with my colleagues to channel federal funds where they are most needed and can make the most difference for our island,” said Congresswoman Bordallo today after the report was released.

One of the principal reasons for Congresswoman Bordallo’s and her colleagues’ request to GAO to conduct this study was to secure an analysis to complement the efforts to increase Medicaid payments for the territories. While the report does not include recommendations, it does reference the formula currently used to determine the federal share of Medicaid payments in the territories. GAO has found that Federal Medicaid spending per capita, like with Medicare, is lower in the territories as compared to the 50 States. Congresswoman Bordallo continues to work with Congresswoman Donna Christensen of the Virgin Islands, and Congressman Dan Burton, who has visited Guam twice in the past two years, to increase Medicaid funding for the territories.

“This study confirms a major concern on our part regarding federal health care funding for the territories. We are being treated differently and unequally. This has been the case for many years and is a situation I continue to work to improve. I maintain my view that limitations placed on certain health care funding for the territories continues to constrain our ability to locally cope with many of our public health challenges,” said Congresswoman Bordallo.

Despite the Medicaid funding limitations that have long existed in law, calculations reveal that the current level of funding provided by the indexed formula, in addition to Compact-impact assistance, is close to meeting Guam’s actual incurred Medicaid costs. “We are within reach, but this effort relates to difficult Federal budget pressures. With the GAO report, we have underscored the crux of the issue. There are key differences in these programs for the territories, and in many ways, improvements should be made to the funding allocations.”

Executive Summary