To amend the Social Security Act to provide for payment parity for Puerto Rico, the Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa under the Medicaid Program, and for other purposes.

Summary: Territorial Health Parity Act of 2009 - Amends title XI of the Social Security Act (SSA) to sunset at the end of FY2009 the limitation on Medicaid payments to Puerto Rico, the Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa.

Amends SSA title XIX (Medicaid) to: (1) repeal, as of the end of FY2011, the federal medical assistance percentage (FMAP) of 50% that applies to such territories; and (2) set the new FMAP for such territories at one determined by the Secretary of Health and Human Services (Secretary) in consultation with the Secretary of the Interior. Specifies a transitional FMAP for such territories for FY2010-FY2011.

Requires the Secretary to report to Congress on the per capita income data used to promulgate the FMAP in the territories and how such data differ from the per capita income data used to promulgate FMAPs for the 50 states and the District of Columbia. Requires the report to include recommendations on how FMAPs can be calculated for the territories to ensure parity with the 50 states and the District of Columbia.

Amends the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 to extend the Medicaid program to the citizens of the Freely Associated States (Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau).

Amends SSA title XIX to set a 100% FMAP for otherwise qualified services rendered to such citizens.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Territorial Health Parity Act of 
2009''.

SEC. 2. MEDICAID PAYMENT PARITY FOR THE TERRITORIES.

    (a) Elimination of Funding Limitations for Puerto Rico, the Virgin 
Islands, Guam, the Northern Mariana Islands, and American Samoa.--
            (1) In general.--Section 1108 of the Social Security Act 
        (42 U.S.C. 1308) is amended--
                    (A) in subsection (f), in the matter before 
                paragraph (1), by striking ``subsection (g)'' and 
                inserting ``subsections (g) and (h)'';
                    (B) in subsection (g)(2), in the matter before 
                subparagraph (A), by inserting ``and subsection (h)'' 
                after ``paragraph (3)''; and
                    (C) by adding at the end the following new 
                subsection:
    ``(h) Sunset of Funding Limitations for Puerto Rico, the Virgin 
Islands, Guam, the Northern Mariana Islands, and American Samoa.--
Subsections (f) and (g) shall not apply to Puerto Rico, the Virgin 
Islands, Guam, the Northern Mariana Islands, and American Samoa for any 
fiscal year after fiscal year 2009.''.
            (2) Conforming amendment.--Section 1903(u) of such Act (42 
        U.S.C. 1396c(u)) is amended by striking paragraph (4).
            (3) Effective date.--The amendments made by this subsection 
        shall apply beginning with fiscal year 2010.
    (b) Parity in FMAP.--
            (1) In general.--Section 1905(b)(2) of such Act (42 U.S.C. 
        1396d(b)(2)) is amended by inserting after ``50 per centum'' 
        the following: ``(except that, beginning with fiscal year 2012, 
        the Federal medical assistance percentage for Puerto Rico, the 
        Virgin Islands, Guam, the Northern Mariana Islands, and 
        American Samoa shall be the Federal medical assistance 
        percentage determined by the Secretary in consultation (for the 
        Virgin Islands, Guam, the Northern Mariana Islands, and 
        American Samoa) with the Secretary of the Interior)''.
            (2) 2-fiscal-year transition.--Notwithstanding any other 
        provision of law, during fiscal years 2010 and 2011, the 
        Federal medical assistance percentage established under section 
        1905(b) of the Social Security Act (42 U.S.C. 1396d(b)) for 
        Puerto Rico, the Virgin Islands, Guam, the Northern Mariana 
        Islands, and American Samoa shall be the highest such Federal 
        medical assistance percentage applicable to any of the 50 
        States or the District of Columbia for the fiscal year 
        involved, taking into account the application of subsections 
        (a) and (b)(1) of 5001 of division B of the American Recovery 
        and Reinvestment Act of 2009 (Public Law 111-5) to such States 
        and District for calendar quarters during such fiscal years for 
        which such subsections apply respectively.
            (3) Per capita income data.--
                    (A) Report to congress.--Not later than October 1, 
                2010, the Secretary of Health and Human Services shall 
                submit to Congress a report that describes the per 
                capita income data used to promulgate the Federal 
                medical assistance percentage in the territories and 
                how such data differ from the per capita income data 
                used to promulgate Federal medical assistance 
                percentages for the 50 States and the District of 
                Columbia. The report should include recommendations on 
                how the Federal medical assistance percentages can be 
                calculated for the territories to ensure parity with 
                the 50 States and the District of Columbia.
                    (B) Application.--Section 1101(a)(8)(B) of the 
                Social Security Act (42 U.S.C. 1308(a)(8)(B)) is 
                amended--
                            (i) by striking ``(other than Puerto Rico, 
                        the Virgin Islands, and Guam)'' and inserting 
                        ``(including Puerto Rico, the Virgin Islands, 
                        Guam, the Northern Mariana Islands, and 
                        American Samoa)''; and
                            (ii) by inserting ``(or, if such 
                        satisfactory data are not available in the case 
                        of the Virgin Islands, Guam, the Northern 
                        Mariana Islands, or American Samoa, 
                        satisfactory data available from the Department 
                        of the Interior for the same period, or if such 
                        satisfactory data are not available in the case 
                        of Puerto Rico, satisfactory data available 
                        from the Government of the Commonwealth of 
                        Puerto Rico for the same period)'' after 
                        ``Department of Commerce''.
            (4) Relation to american recovery and reinvestment act of 
        2009.--For any period and territory in which the provisions of 
        this subsection apply to a territory, the provisions of section 
        5001(b)(2) of division B of the American Recovery and 
        Reinvestment Act of 2009 (Public Law 111-5) shall not apply 
        (except as otherwise specifically provided in paragraph (2)).

SEC. 3. CLARIFICATION OF MEDICAID COVERAGE FOR CITIZENS OF FREELY 
              ASSOCIATED STATES.

    (a) In General.--Section 402(b)(2) of the Personal Responsibility 
and Work Opportunity Reconciliation Act of 1996 (8 U.S.C. 1612(b)(2)) 
is amended by adding at the end the following:
                    ``(G) Medicaid exception for citizens of freely 
                associated states.--With respect to eligibility for 
                benefits for the program defined in paragraph (3)(C) 
                (relating to the Medicaid program), paragraph (1) shall 
                not apply to any individual who lawfully resides in the 
                United States (including territories and possessions of 
                the United States) in accordance with the Compacts of 
                Free Association between the Government of the United 
                States and the Governments of the Federated States of 
                Micronesia, the Republic of the Marshall Islands, and 
                the Republic of Palau.''.
    (b) Conforming Definition of Qualified Alien.--Section 431(b) of 
such Act (8 U.S.C. 1641(b)) is amended--
            (1) in paragraph (6), by striking ``or'' at the end;
            (2) in paragraph (7), by striking the period at the end and 
        inserting ``; or''; and
            (3) by adding at the end the following:
            ``(8) an individual who lawfully resides in the United 
        States (including territories and possessions of the United 
        States) in accordance with a Compact of Free Association 
        referred to in section 402(b)(2)(G), but only with respect to 
        the program defined in section 402(b)(3)(C) (relating to the 
        Medicaid program).''.
    (c) Setting FMAP at 100 Percent.--The third sentence of section 
1905(b) of the Social Security Act (42 U.S.C. 1396d(b)) is amended by 
inserting before the period at the end the following: ``and as medical 
assistance for individuals described in section 402(b)(2)(G) of the 
Personal Responsibility and Work Opportunity Reconciliation Act of 
1996''.
    (d) Effective Date.--The amendments made by this Act take effect on 
October 1, 2009, Act and apply to benefits and assistance provided on 
or after that date.