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Op-Ed Part 2: Affordable Care Act (Obamacare)

With November elections behind us, healthcare continues to be a topic of careful attention and intense debate.

The future of healthcare programs, such as Medicaid and Medicare, carry significant effects for healthcare services in American Samoa and it is important that the people of American Samoa are aware of how these programs have supported our local healthcare system over the past decades as well as how current policies will affect healthcare in the future.


Authorized by the Social Security Amendments of 1965, the Medicaid program was designed to support health services for low income residents across the Nation. Funded by both the Federal and State governments, Medicaid is considered a joint federal-state program. Each state administers its own Medicaid program while the federal Centers for Medicare and Medicaid Services (CMS) monitor the state programs and oversee federal requirements for service delivery, quality, funding, and eligibility guidelines.

Each State and Territory must first submit a State Medicaid Plan to CMS for approval outlining the apportionment of funds, mechanics of the program, and services covered. States may revise and amend their State Plans upon CMS approval.

The Medicaid program first became available to American Samoa in FY1983, with an initial effective date of October 1, 1982 and American Samoa first submitted a State Plan to CMS on December 9, 1982, which CMS approved on January 28, 1983.

One major difference between American Samoa's Medicaid program compared to other States and Territories is that the American Samoa program operates under a broad waiver, which exempts it from several requirements that apply to other States and Territories (Section 1902(j) of the Social Security Act (42 USC 1396a)). For example, American Samoa does not determine Medicaid eligibility on an individual basis as do the States.

Instead, American Samoa utilizes a system of "presumed eligibility," meaning that each year the percentage of the population (excluding tourists and non residents) below 200% of the poverty level is estimated and, after approval of the estimate, CMS pays expenditures for Medicaid based on that percentage. As a result, only in American Samoa is the Medicaid program coverage up to about 87% of the total population. The Medicaid program in American Samoa will enjoy this freedom as long as Congress does not change the statutory waiver in the law.

Furthermore, compared to the 50 States and D.C., American Samoa faces two key differences in Medicaid funding under the Social Security Act: 1) a statutory funding cap under Section 1108(f); and 2) a statutory limit on the federal matching rate under Section 1905(b), known as the Federal Medical Assistance Percentage (FMAP) which was previously fixed at 50 percent.

The Affordable Care Act (ACA) increased American Samoa's federal Medicaid spending cap significantly. The ACA gave American Samoa a $180 million increase in the Territory's Medicaid cap over a nine year period, from 2011 to 2019, lifting the overall cap to $285.5 million in Medicaid funding over the nine year period.

In addition, the ACA increased American Samoa's FMAP from 50 to 55 percent federal share. Accordingly, for every dollar of Medicaid funding spent in the Territory, the Federal Government will now pay 55%, matched by a 45% ASG share.

As an added bonus to our local Medicaid program, the ACA has also authorized the use of Health Insurance Exchange funding towards American Samoa's Medicaid program.

Since the territory opted out of the Exchange option, the ACA now permits that the funding be distributed to American Samoa's Medicaid program from 2014 to 2019. While American Samoa's actual funding allocation is yet to be finalized by the Secretary of the United States Department of Health and Human Services (USDHHS), Section 1323 of the ACA attributes $75 million to be shared among American Samoa, Guam, USVI, and CNMI. American Samoa could expect approximately $16.5 million if the funding is calculated with the same ratio as the four Territories' latest Medicaid grants.

Medicaid funding in American Samoa is used solely for services provided through LBJ Tropical Medical Center (LBJ).

To date (through the June 30, 2012 quarter), the Federal government has contributed a grand total of $137,651,151 to American Samoa's Medicaid Program. This total amount of funding also includes funds for the Children's Health Insurance Program (CHIP), geared towards uninsured children as well as three years of a 30 percent increase in Medicaid caps through the American Recovery and Reinvestment Act (ARRA) funds from 2009 to 2011.

The most recent change in the local operation of American Samoa's Medicaid Program was in October 2011, when the American Samoa State Medicaid Office moved from the LBJ Tropical Medical Center (LBJ) to the Governor's office. Following this change, in April 2012 the American Samoa Government (ASG) worked with the CMS to transition the Federal Medicaid grant administration from LBJ to the ASG Department of Treasury.

The ASG Department of Treasury now administers the draws of Federal Medicaid funds under the oversight of the American Samoa State Medicaid Office.


Congress created Medicare in 1965, also under the Social Security Act. The program was originally designed to solely provide health insurance to people age 65 and older, regardless of income or medical history. In 1972, Congress expanded Medicare to include people under 65 who have permanent disabilities and receive Social Security Disability Insurance (SSDI) as well as those with permanent kidney failure requiring dialysis or a kidney transplant. In 2001, Congress further expanded Medicare to cover younger people with amyotrophic lateral sclerosis (ALS, or Lou Gehrig's disease).

Medicare, which is an entirely federal program, consists of four parts: Part A, Part, B, Part C, and Part D. The original two parts of the program, Part A and Part B, cover inpatient services and outpatient care, respectively. In 1997, Congress added Part C Medicare Advantage which allows enrollees to receive Medicare benefits through a private plan, and in 2003, Part D was created under the Medicare Modernization Act of 2003 to cover specialized prescription drugs

In American Samoa, Medicare services under Part A (inpatient services free of charge to the patients) and Part B (outpatient services requiring a premium from the patient) are billed first to Medicare, then Medicaid, for all individuals who are dual-eligible patients.

Individuals may receive prescriptions either directly through LBJ or under Part D, which requires a premium for mail-order specialty prescription drugs. Both options require some form of co-payment.

American Samoa does not have Part C, Medicare Advantage Health Plans. Medicare Advantage Plans bid every year on the service area they want to cover and only one drug plan (United) bid on the American Samoa service area, but for prescription drug coverage only under Part D. No Medicare Advantage Plans have bid for health plan coverage for American Samoa, similar to many rural areas in the States and Territories.

Under Medicare, a claim for a covered item or service is submitted by a qualified healthcare provider and the claim is either paid or denied based on Medicare's written guidelines. LBJ is a Medicare certified hospital/renal dialysis facility, submitting claims for payment to Medicare for Part A and Part B. Under Medicare Part D, claims are submitted directed to the contracted drug company, United.

Like Medicaid, American Samoa's Medicare program is unique in that it is based on a cost allocation. Since the Medicare Modernization Act of 2003 did not provide "extra help" to the Territories, Congress allocated Enhanced Allotment Funds to Medicaid to help cover some of the cost of prescription to those who are "dual-eligible" under both Medicare and Medicaid.

The Social Security Administration (SSA) is responsible for enrolling individuals in Medicare. While the local SSA office in American Samoa serves this role, individuals may also enroll online through the SSA website.

According to CMS, approximately 4,000 people in American Samoa receive benefits through Part A and/or Part B Medicare. Of that group, approximately 2800 have Part B and 32 are enrolled in Part D. For the past 20 years (FY1991-FY2011), Medicare reimbursements to American Samoans totaled $128,686,925.

The ACA also provides benefits to Medicare beneficiaries in American Samoa. For example, the ACA provides prescription drug cost relief for Medicare beneficiaries who fall into what is called the "donut hole" coverage gap.

Through various measures, the ACA attempts to close this gap by 2020. For example, USDHHS issued $250 one-time, tax-free rebate checks to assist eligible seniors in American Samoa in purchasing their prescriptions. Starting in 2011, eligible beneficiaries also received a 50 percent discount on covered brand name medications and Medicare also began paying 7 percent of the cost of generic drugs for these seniors.

As I mentioned in a recent commentary on Obamacare, or as it is formally known, the Affordable Care Act (ACA), I remain a strong supporter of the historic law especially because it makes important increases in federal funding for American Samoa's Medicare and Medicaid programs. Essentially, the ACA provides American Samoa the largest boost ever in federal healthcare funds to the Territories, especially with regards to these two essential programs.

As a new administration commences in our local government and health priorities are revisited, the people of American Samoa ought to be aware of the impact of these two programs, and especially their added benefits through the ACA.

The future of healthcare in American Samoa is tied to the future of Medicaid and Medicare, and I have every confidence that our local government will be better able to adapt to the evolving healthcare needs of the people of American Samoa as these two programs are strengthened by our federal government.