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Another Medicaid Cliff Approaches for Puerto Rico

Puerto Rico faces another Medicaid Cliff this fall. Because Puerto Rico is consistently underfunded for Medicaid, the territory once again faces a Medicaid cliff — the territory will run out of funding for medical care on September 30th, 2021, if no additional funds are provided.

Because Puerto Rico is not included in the federal Medicaid program – and receives a limited amount of funding each year instead – Medicaid emergency spending “cliffs” for the U.S. territory have now become a regular occurrence.

Congress usually comes up with some emergency funding to tide the local government over. However, without certainty in funding, Puerto Rico cannot negotiate contracts for medical needs. Healthcare professionals leave the Island in large numbers since their livelihoods are uncertain, and medical needs are a common reason for residents to move to the States.

Both Puerto Rico’s local government and Congress waste time and money debating additional stop-gap funding every couple of years, and the Island’s healthcare system operates in a state of crisis that makes long-term planning difficult.


Of course, 2020 was a difficult year for health care across the nation. Puerto Rico faced additional challenges. The Island has logistics issues that make it more difficult to deliver vaccines, testing, and treatments. Residents of Puerto Rico also have higher levels of co-morbidities and chronic conditions that make COVID-19 more dangerous. Since Puerto Rico’s Medicaid system has been underfunded for decades, the Island’s healthcare system is also affected by long-term challenges.

On March 5, Governor Pierluisi sent a letter to the leaders in Congress, asking them to continue to support “adequate funding” for Medicaid in Puerto Rico.

“Medicaid is designed to treat our nation’s most vulnerable populations,” he wrote, “including low-income families, the elderly, children, and individuals with disabilities…Unfortunately, due to COVID-19’s numerous unforeseen disturbances to health care facilities and bureaucratic delays, the Government of Puerto Rico was unable to obligate the totality of the $2.9 billion appropriated for FY 2020.”

Pierluisi went on to explain that the main reason for this failure was the Fiscal Oversight and Management Board’s refusal to allow the government to add new beneficiaries to the Medicaid rolls. The FOMB did not want to approve the expenditures, since the funding was temporary. In October, however, negotiations proved fruitful, and the new Vital Plan was approved in December.

Pierluisi asked that the 2020 funding be made available to cover the costs of the new plan.

“Nonetheless, federal funding for Puerto Rico’s Medicaid program is facing a fiscal cliff on September 30, 2021,” Pierluisi explained. “Therefore, I will continue to advocate for equal treatment of Puerto Rico’s Medicaid program by promoting the transition of federal funding for Puerto Rico to a state-like program instead of a statutorily capped block grant, and an FMAP based on Puerto Rico’s per capita income, relative to the nation.”

The changes Pierluisi referenced would put Puerto Rico in the same position as the states.

“I will fight to ensure that we are able to attain adequate long-term funding to provide the life-saving services patients require to meet their medical needs, and to retain medical specialists by providing competitive reimbursements,” Pierluisi continued. “Without proper federal funding, there will be a reduction of health care services exacerbating the ongoing medical crisis.”

Upcoming hearing

Meanwhile, the Health Subcommittee  of the House Committee on Energy and Commerce will hold a hearing on Wednesday, March 17, on the subject of “Averting a Crisis: Protecting Access to Health Care in the U.S. Territories.”

“The U.S. territories are once again facing a fiscal cliff that, if crossed, would endanger access to health care services for millions of Americans,” Energy and Commerce Chairman Frank Pallone, Jr. (D-NJ) and Health Subcommittee Chairwoman Anna G. Eshoo (D-CA) announced. “Congress has a responsibility to ensure that the Medicaid programs in the territories continue to receive the resources and support they need to care for their residents. This is especially critical right now as they work with limited resources to respond to the COVID-19 pandemic. Next week we will hear from policy experts as we consider legislation to avert the looming fiscal cliff and ensure that the territories can continue to provide medical care to those in need.”

The meeting, which will be fully remote, will be streamed at the Committee’s webpage. It will be available as a live broadcast on Wednesday, and thereafter will be available as a recording.

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