Health Engagement Challenges and Strategic Perspectives for the 2023 Health Financing Transition in the Federated States of Micronesia and the Republic of the Marshall Islands

The Federated States of Micronesia (FSM) and the Republic of the Marshall Islands (RMI) are small sovereign island nations in the Pacific. These nations maintain a special relationship with the US Government (USG) through the Compacts of Free Association (COFA), first signed into law in 1986. One component of COFA—the more than $60 million in direct USG annual financial assistance to FSM and RMI through Compact Sector grants—will end in 2023. This financing shift brings an opportunity to re-assess FSM-RMI-USG engagement specifically around health systems strengthening moving forward. At present, FSM-RMI are included in HHS’ domestic appropriations and authorizations framework; FSM-RMI are eligible grant recipients in the same way that states are. Discordant operating environments, differing health priorities, and varying levels of local health system infrastructure challenge the efficacy of the traditional grant-based HHS domestic model in FSM-RMI. Moving forward, FSM-RMI leaders may seek to draw on alternative models of health engagement, such as a development-focused foreign appropriations framework or a domestic appropriations framework catered to sovereign populations. Two models that may hold potential for FSM and RMI– the United States Agency for International Development model and U.S. Government support for Alaska Native people—are considered here.