This legislation, known as the "Medicaid Improvement for Insular Areas Act of 2025," aims to fundamentally alter how Medicaid is funded in U.S. territories. Its primary purpose is to remove the existing federal funding limitations, often referred to as a "cap," that currently apply to these regions. This change is intended to provide more equitable access to Medicaid resources for territorial populations. Specifically, the bill amends Section 1108 of the Social Security Act to sunset subsections (f) and (g), which contain the general Medicaid funding limitations. This elimination of the cap will apply to Puerto Rico , the Virgin Islands , Guam , the Northern Mariana Islands , and American Samoa . Conforming amendments are also made to other sections of the Social Security Act to ensure consistency with the removal of these limitations, with all changes becoming effective beginning with fiscal year 2025 .