Human Services Commissioner Averil George testified during a Senate Budget, Appropriations and Finance Committee hearing Wednesday that the recently enacted One Big Beautiful Bill Act maintains most existing rules for the territory’s Medicaid program.
George led testimony in support of a $69 million General Fund appropriation for 2026. The bulk of the department’s projected funding comes from federal sources for a total operating budget of more than $297 million. During her prepared testimony, George said the U.S. Virgin Islands will also be excluded from several Medicaid provisions that only affect states.
New federal Medicaid requirements include:
Reductions in retroactive coverage, limiting backdated Medicaid eligibility to one or two months, beginning in 2027
Amended definitions of “qualified aliens” and updated rules regarding eligibility for Medicaid and the Children’s Health Insurance Program
Immediate removal of Federal Medical Assistance Percentage for specified gender dysphoria services
Requirements for participation in federal pharmacy data surveys if the territory’s Medicaid Drug Rebate Program is active
Implementation of a federal system to identify duplicate Medicaid enrollees
Immediate prohibitions on Medicaid funding for providers who perform abortions beyond cases of rape, incest or when the pregnant person’s life is in danger
Stricter provider enrollment checks
Stricter eligibility verification and a prohibition on FMAP funds for people with unverified citizenship or immigration status
An update to asset limits for long-term care services, including a maximum home equity cap of $1 million
The territory is excluded from “state-only” provisions like work requirements for Medicaid expansion for adults and caps on state-directed payments related to Medicaid rates. Gary Smith, DHS’s Medicaid director, said the OBBBA will not affect the territory’s overall Medicaid funding.
“The only FMAP impact will be on the undocumented population,” he said, but the territory can still provide emergency medical services in those cases. That cost-share will be reduced from 90 percent federally funded and 10 percent locally funded to 83 percent and 17 percent. Smith said the prevailing sentiment in Washington, D.C., is that the territory already receives “disparate” treatment regarding its Medicaid program, “and they made that decision not to burden us with those changes that are applicable to the … states.”
Assistant DHS Commissioner Taetia Phillips Dorsett added that if a work requirement was implemented, roughly half of the territory’s 20,512 Medicaid recipients would become ineligible. Approximately 7,000 people would be exempted due to age or disability and only 3,258 are listed as currently working.
The most tense moments in Wednesday’s budget hearing came when Senate Majority Leader Kurt Vialet questioned outstanding vendor payments from the Office of Child Care and Regulatory Services, which is funded entirely through the federal Office of Child Care and Development Fund.
“What takes so long to process a hundred percent federally-funded program to individuals who are providing services?” he asked, including some vendors who have been working with DHS for years. Tishma Tucker-Lans, the office’s administrator, said delays can occur when vendors fail to timely submit invoices or don’t provide all of the necessary documentation.
“So you’re telling me you have a vendor that has been under your purview for years and that vendor has all these outstanding documents from last year, and you don’t have a system to remedy that,” he said.
Tucker-Lans maintained that vendors do submit documents late and that her office has reached out to offer assistance, adding that providers also have to keep their DHS licenses active.
“You’re making up all type of excuses,” Vialet replied. “The long and short is, your office is not producing. I am seeing emails — the same emails — over and over from the same individuals to your office, and no movement. I just actually called you up here because I want you to know that you cannot have federal funds from last year — one hundred percent funded — and it’s not being paid to providers. And these are providers that provide service to you for years.”
Later, Tucker-Lans said it wouldn’t be fair to lay the blame entirely at the feet of OCCRS, because the office has to follow federal guidelines, policies and procedures.
“And at this present time, I will uphold to that as long as I’m standing in this position,” she said.
