June 23, 2026 | Lana McKinney
Acute care facilities in U.S. territories and freely associated states experience significant strains on capacity, driven by:
- Difficulty transitioning medically stable patients to the next appropriate level of care.
- Insufficient staff to meet patient needs.
- Limited transitional or extended care facilities.
This creates a bottleneck that compromises the efficiency and stability of health systems. However, there are policy levers available to island jurisdictions that can support appropriate care for patients requiring institutional or home-based services and supports. These include payment flexibilities, workforce initiatives, and collaborative partnerships.
Current State
Infrastructure
Island jurisdictions have limited hospital and long-term care (LTC) facility capacity. While many have government-run hospitals, three jurisdictions — American Samoa, the Commonwealth of the Northern Mariana Islands (CNMI), and Palau — have only one hospital, the Federated States of Micronesia has one hospital per state, and the Republic of the Marshall Islands and the U.S. Virgin Islands (USVI) each operate one hospital in both of their most populous islands. Additionally, Guam has just one Medicare-certified skilled nursing facility with 40 Medicare beds, operated by the Guam Memorial Hospital Authority, while Puerto Rico has nine Medicare-certified nursing homes for a population of more than three million people.
Without LTC facility capacity, hospitals lack appropriate options for discharge. Geographic isolation, difficulties with recruitment and retention of sufficiently skilled staff (i.e., nursing staff), and supply chain challenges are additional obstacles to establishing and maintaining LTC capacity.
Reimbursement
Federal health care programs also influence the availability of LTC services in the territories. Medicare and Medicaid may cover LTC services under different circumstances; however, federal funding restrictions limit Medicaid in the territories compared to the states. Unlike the annually calculated, income-based Federal Medical Assistance Percentage (FMAP) for states, the territories have a fixed FMAP. The current permanent FMAP for American Samoa, Guam, CNMI, and USVI is 83%, while Puerto Rico’s is 76% through FY2027.
Medicaid funding for the territories also operates under a statutory cap allotment, meaning once the federal allotment is exhausted, the territory must cover all subsequent service costs with local funds. This frequently results in territories expending federal funding mid-year, which leads to service restrictions for residents and financial instability for providers. Finally, while the territories have additional financing restrictions, CNMI and American Samoa are able to operate their Medicaid programs under a special waiver authority.
Policy Strategies
A number of policy strategies may limit the strain on acute care facilities, address LTC needs, and support the provision of appropriate levels of care in island jurisdictions:
Workforce Development
Recruitment and retention of health care workers is a challenge in island jurisdictions, but public health and rural health care workforce strategies may help address staffing needs and capacity.
- Encourage employers and educational institutions to partner with local colleges, vocational schools, and community centers to develop apprenticeship programs and formal career pathways that support skills development, professional advancement, and patient and community needs.
- Identify available educational programs across the region to support a pipeline for students entering medical, nursing, pharmacy, and behavioral health careers.
- Promote and support dedicated in person recruitment opportunities as well as broader strategies that support local candidates and students.
- Develop cross-jurisdictional workforce agreements that allow training completed in one island jurisdiction to be recognized in another.
- Explore workforce training opportunities through commissions (e.g., Western Interstate Commission for Higher Education), universities (e.g., the Pacific Islands Geriatric Workforce Enhancement Program), and public health associations (e.g., Equipping Community Health Workers to Address Alzheimer’s) as well as curriculum exchange and workgroups (e.g., USAPI Health Workforce Development Technical Working Group).
- Support partnerships among island jurisdictions to share resources and learnings related to facility development, financial models, and reimbursement strategies.
- For public employers, decentralize HR functions to create a more efficient hiring process.
- For jurisdictions with professional schools and programs, develop additional training models (i.e., short-term or extended rural placements) or blended learning.
Medicaid and Other Federal Health Programs
U.S. territories can also consider Medicaid policies that encourage community supports over institutional care or pursue other program flexibilities through waivers or state plan amendments. For example, states and territories can provide Home and Community-Based Services and use different authorities to achieve their policy goals. Implementing a Section 1115 demonstration allows for significant flexibility but must be budget neutral. In addition, the Money Follows the Person demonstration supports community-based services over institutional care. CMS awarded time-limited planning grants to Puerto Rico and American Samoa for this initiative. Additionally, the Program of All-Inclusive Care for the Elderly helps older adults remain at home and offers comprehensive medical and social services to eligible individuals.
Supported Care Transitions
Several models support patients moving from hospital to home to control chronic conditions, limit readmissions and emergency department visits, reduce costs, and improve outcomes overall. This includes the Care Transitions Intervention, a short-term training program for patients and caregivers to navigate the move home. The coach’s credentials are flexible and can include nurses, social workers, community health workers, or other professionals. Meanwhile, the Transitional Care Model, provides ongoing care management and is led by an advanced practice nurse.
Collaboration
Strategic partnerships can drive policies that support healthy aging or aging in place. For example, USVI established a commission on aging, while Guam enacted a senior citizens housing task force, both with multi-sector representation. And in December 2025, American Samoa’s Governor issued an Executive Order establishing a Home and Community-Based Services Commission as part of its Money Follows the Person plan, which includes representatives from a number of governmental agencies and areas of expertise.
Legislation
Island legislatures have also explored strategies that support older adults and those with complex health care needs and their families:
- Guam (No. 31-38 (COR)) would establish a regulatory framework for assisted living facilities with the goal of facilitating their development and operation.
- In 2023, USVI 35-0119 authorized mobile integrated health programs to leverage health care personnel for in-home services and prevent costly hospital readmissions.
- CNMI considered a resolution to explore several policy strategies, including leveraging Medicaid flexibilities, and prioritizing collaboration and financial support to meet the needs of elderly residents.
- In 2026, Puerto Rico enacted legislation to improve access to information about the benefits and services available to older adults.
Reviewed by Andy Baker-White, JD, MPH, Senior Director, State Health Policy; Alex Wheatley, Senior Director, Island Support; Alex Kearly, MPH, Senior Director, Population Health; Talyah Sands Leavitt, MPH, Director, Health Improvement.
