The Commonwealth government has already spent almost all of its ‘Obamacare’ Federal grants for 2019 and much of its grants for 2018.
If it continues to spend the additional money for Puerto Rico’s Medicaid program provided by the 2010 Federal healthcare reform at the current rate, it will use up all of the funding provided to last through 2019 by May 2018.
This would increase the budgetary deficit for the territory’s overall healthcare program for low-income individuals from $59 million during the Commonwealth fiscal year that ended June 30th to $1.796 billion in Fiscal Year 2018 and to $2.02 billion in Fiscal Year 2019.
The administration of Governor Alejandro Garcia Padilla (“commonwealth status” party) accelerated the rate at which it is spending down the funds this year.
It admitted the action in a 180-page financial report released Thursday night by the Government Development Bank.
The report curiously stated that “the Commonwealth intends to intensify its efforts to have [the] funding renewed by Congress.” The statement is curious for several reasons.
- One is that renewing the funding would extend it at the earliest beginning October 1st, 2019 – 16 months after it would run out.
- Another is that the Federal government is highly unlikely to appropriate money for Fiscal Year 2020 before then.
- A third reason is that the U.S. House of Representatives has voted to specifically prevent Puerto Rico from spending unused amounts of the largest portion of the funds to help reduce the Federal budget deficit and congressional Republicans want to replace ‘Obamacare.’
- Some members of Congress would be unlikely to regard spending money for 2018 and 2019 in earlier years as a persuasive argument for providing more funding.
Additionally, the Garcia Administration has made no apparent attempt to have the funding renewed. None of its congressional lobbyists even include the subject on their required identification of matters on which they have worked.
There is already concern among key members of Congress about the Commonwealth’s spending rate. The top Republicans on the committees with jurisdiction over Medicaid, House Energy and Commerce Committee Chairman Fred Upton (MI) and Senate Finance Committee Ranking Minority Member Orrin Hatch (UT), recently sent a letter to the U.S. Centers for Medicare and Medicaid Services asking whether the rate exceeded the cap on Federal contributions to Medicaid in Puerto Rico.
As a territory, the Commonwealth gets far less Federal support for its Medicaid program than would a State. The Federal government contributes a lower percentage of the cost. Additionally, the funding is limited by a dollar amount.
The 2010 Federal healthcare reform raised the Federal contribution from 50% to 55%. The Federal government would pay 83% of the cost of most of a State of Puerto Rico’s program and at least 90% of the rest.
Ongoing law provides the territory with a fixed amount for Medicaid that increases annually for inflation. The amount for Commonwealth Fiscal Year 2015 is $305 million.
If it had been a State in Federal Fiscal Year 2011, the open-ended funding Puerto Rico would have received would have been about $2.1 billion. The $1.8 billion a year more for Medicaid does not include another $1.5 billion that a State of Puerto Rico would have gotten if it had long-term care facilities.
The program would have also provided healthcare to 2.1 million Puerto Ricans instead of the 1.2 million who received it from the Commonwealth’s program in 2011 or the 1.4 million who are currently receiving it.
The 2010 Federal law gave Puerto Rico an additional $5.487 billion for its Medicaid program for July 1, 2011 to September 30, 2019.
It also allotted the territory another $925 million for calendar years 2014 through 2019 to enable the Commonwealth to help middle-income workers pay for healthcare insurance premiums. But it authorized the territory to use this money for Medicaid instead if the local government wanted because subsidies equal to those the law funds in the States would cost $1.5 billion a year in Puerto Rico.
The insular government, not surprisingly, decided to use the $925 million for Medicaid.
The law does not prevent the territory from using the total of $6.412 billion on its own schedule as long as it spends 45 cents for each 55 cents of the Federal money that it uses.
The cost of the insular program, $2.495 billion last fiscal year, is budgeted at $2.647 billion this fiscal year. Garcia Administration officials recently said that they plan to increase spending $534 million in the year beginning next July 1st.
Federal funds provided $1.284 billion of the cost last fiscal year and are anticipated to contribute $1.5 billion this fiscal year.