Medicaid: $2.28M local match could unlock $11M more in federal funds

The Commonwealth Medicaid Agency told lawmakers that an additional $2.28 million in local funding could allow the CNMI to tap approximately $11 million more in federal Medicaid funds in fiscal year 2027.

CMA director George Cruz made the case during the House Ways and Means Committee’s fiscal year 2027 budget hearing Aug. 27 on Capitol Hill, saying the agency’s federal allotment for the coming fiscal year is approximately $111 million. Fully maximizing that amount, however, would require about $7.92 million in local matching funds.

The administration’s Scenario 1 budget provides approximately $5.64 million for CMA, leaving an estimated $2.28 million gap.

“Scenario one leaves an estimated $2.28 million gap between the funding provided on scenario one and the amount necessary for us to be fully maximized,” Cruz said. “Because Medicaid is a matching program, that local difference has substantial larger impact.”

Cruz said the agency supports Scenario 1 given the Commonwealth’s financial condition and considers it the minimum responsible funding level needed to maintain Medicaid operations. But he urged lawmakers to consider adding funding if additional resources become available during budget deliberations.

“Scenario 1 protects our baseline, but additional local investment expands our opportunities,” Cruz said.

Near the end of the agency’s presentation, Cruz again emphasized the potential return from the additional local appropriation.

“Scenario one is the floor, not the ceiling,” he said. “But the additional $2.28 million would allow the Commonwealth of Medicaid to maximize the $111 million in federal Medicaid funding available to us now.”

Cruz said the additional $2.28 million could leverage approximately $11 million more in federal Medicaid money.

“It represents the opportunity to leverage approximately $11 million more,” he said. “That means more resources flowing into our health care providers, more resources supporting health care services, more resources supporting our beneficiaries, and more resources circulating through our economy.”

The funding issue is particularly significant because CMA officials told lawmakers that the agency expects to return a little more than $10.8 million in unused federal funds at the end of the current fiscal year because of a shortage in local matching funds.

CMA Administrative Services manager Vicenta Rosario said the agency initially received a $6.2 million local appropriation for fiscal year 2026, but subsequent revised appropriations reduced its budget to $4.6 million.

“By the end of this fiscal year, the CMA is expecting to return a little over $10.8 million in unspent federal funds due to the shortfall,” Rosario said.

The funding discussion comes as Medicaid enrollment has grown sharply.

CMA senior policy and strategic initiative analyst Roman Tudela said the agency is serving approximately 23,690 active Medicaid beneficiaries, compared with about 14,946 in October 2025, an increase of approximately 58.5%.

Cruz said that represents about 56% of the CNMI population and cautioned that reduced government work hours, anticipated furloughs, and other potential workforce reductions could increase the number of people relying on Medicaid in fiscal year 2027.

Rosario similarly warned that government employees who can no longer afford their health insurance premiums because of furloughs or reduced work hours could turn to Medicaid for coverage, adding further pressure on the program.

She also warned that insufficient local matching funds could affect provider payments and ultimately access to healthcare.

“When the Medicaid program does not have the sufficient local match to draw down any more federal funds to pay our providers, they will not get paid,” Rosario said.

Despite the funding pressures, CMA reported progress in reducing longstanding backlogs and modernizing its operations.

Cruz said the agency has reduced its prior-authorization backlog from more than five years to less than one year and is aiming for real-time prior-authorization processing by the end of the current fiscal year. The agency has also closed a request for proposals for a modernized eligibility and enrollment system intended to speed up determinations and reduce reliance on paper-based processing.

CMA also reported approximately $389 million in Medicaid reimbursements over fiscal years 2023 through 2026. That included about $83 million in fiscal year 2023, more than $86 million in fiscal year 2024, more than $120 million in fiscal year 2025, and a projected approximately $100 million in fiscal year 2026.

Cruz said Medicaid dollars flow through hospitals, physicians, pharmacies, medical suppliers, specialty providers, and other healthcare services in the Commonwealth.