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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.
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.