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Another Medicaid Cliff for Puerto Rico?

Rep. Jenniffer Gonzalez-Colon (R-PR) wrote a letter to House and Senate Leaders encouraging them to provide additional funding for Medicaid in Puerto Rico, in an effort to stave off an expected Medicaid Cliff in September.

The letter was addressed to Speaker Nancy Pelosi (D-CA), Minority Leader Kevin McCarthy (R-CA),  Majority Leader Chuck Schumer (D-NY), and Minority Leader Mitch McConnell (R-KY).

Medicaid inequity

The letter began by reminding the readers that Puerto Rico has faced inequity in Medicaid funding for many years. “Unlike the States, for which Medicaid spending is open-ended,” she wrote, “Puerto Rico can access federal dollars only up to an annual ceiling.”

Medicaid in the States has no spending cap, and resources automatically increase in response to the needs of recipients. Funding is based on the expenditures of the States on their qualifying population. In Puerto Rico, there is an annual limit, which does not change even under special circumstances such as a natural disaster or pandemic. The spending cap is detailed under Section 1108 of the Social Security Act.

“The amount provided under Section 1108 has historically been insufficient to meet the needs of the territories’ Medicaid programs and bears no relation with the healthcare expenditures needed for its medically indigent population to receive proper and effective diagnosis, treatment, care, and medication services,” the letter continues.

Stopgap measures

Gonzalez-Colon goes on to list some additional funding that has been provided by Congress. She points out that the temporary, one-time increases in funding did not anticipate the costs of COVID-19 testing, vaccinations, and treatment. They also did not provide enough to cover new Medicaid participants who had lost their jobs in the pandemic.

“[T]he Covid-19 public health emergency we have been facing since early 2020 has laid bare one of the most pernicious effects of the Section 1108 funding limitation: the lack of flexibility of our territorial Medicaid programs to deal with additional costs resulting from unforeseen circumstances.”

As a State, Puerto Rico would not face Medicaid spending caps, and would receive a higher percentage of reimbursement for Medicaid spending.  Program recipients would qualify for a much wider range of services, and benefits would be more generous.

As a territory, the Island receives significantly less than States of the same size and population. The need to return to Congress frequently to request more funds hampers long-range planning and the most effective use of resources.

Another Medicaid cliff

“We are all currently working to avert another Medicaid cliff at the end of this fiscal year, when the federal financing for Puerto Rico’s $3.5 billion Medicaid program will revert to less than $400 million,” the letter continues. “however, even before we reach that point, Puerto Rico is expected to exhaust its federal Medicaid funding by September 1st, 2021, and to experience a shortfall in excess of $106 million by September 30th.”

The letter concludes with a request for funding to cover the shortfall .

Read the full letter.


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