Medicaid is the federally-funded medical assistance available in every state for any person who cannot afford to pay for their own healthcare costs. (Medicare is specifically for elderly and disabled individuals.)
States can refuse Medicaid (though none currently do) and each state sets its own eligibility criteria. However, the federal government determines how much of the federal-state partnership is paid for by the federal government and how much is covered by the state.
Medicaid is a federal-state partnership.
In Mississippi, for example, the federal government pays 74.63% of the costs. In Wyoming, the state and the nation split the costs 50/50.
States can apply for waivers to allow changes in the way they handle Medicaid, and some states have even renamed the program. In Alaska, for example, it’s called DenaliCare. Connecticut has HuskyHealth.
However, all 50 states and the District of Columbia can count on federal funds in the percentage the government has determined they need. This is generally based on the average income for the state. In Mississippi, the state government can be confident of having 74.63% of covered expenses paid for with federal funds.
Medicaid in Puerto Rico
Puerto Rico, which can legally be treated differently from a state, gets a lower percentage of federal funds than a state would. The federal share for Puerto Rico is currently 55%, even though half the residents of Puerto Rico were eligible for Medicaid before the hurricane season. If Puerto Rico were a state, the federal government would officailly pay 83%.
Puerto Rico also has a cap on the amount of federal funds received for Medicaid. When that cap is reached, the federal government provides no more funds, regardless of the additional costs. Medicaid funds can end early in the year, and Puerto Rico has to pay all the rest of the Medicaid costs with no further assistance.
So the official 55% federal contribution is only theoretical. Once the cap is hit each year, the federal government pays 0%. This means that over the course of the year, the federal government pays only 15 to 20 percent of the medical costs for the poor in Puerto Rico, not 55%.
Even in the best of times, Puerto Rico has had much higher medical expenses than any of the 50 states. In recent years, with epidemic levels of Zika virus and Dengue fever, Puerto Rico was hard pressed to meet the medical needs of the residents.
A natural disaster or a medical emergency in a state may increase medical costs. However, federal funds will cover the usual percentage of those additional costs, so a state automatically receives additional funds as needed. This is not true for Puerto Rico. Federal funding doesn’t respond automatically to greater need. There is still a federal cap.
The 2017 hurricane season added to the Island’s medical costs significantly. This provides an opportunity for the federal government to make changes, as it has in the past for states. After Hurricane Katrina, for example, Louisiana had 100% Medicaid coverage with no state contribution for 24 months. Many other states have used “Katrina waivers” following natural disasters since then.
The Center on Budget and Policy Priorities has advocated for this approach in an opinion piece and a report. Both publications point out not only that the United States covers additional medical costs for states suffering from natural disasters, but also that Puerto Rico (and the U.S. Virgin Islands) will need additional support because of their special circumstances.
Will Congress step up to the plate and treat Puerto Rico equally in its time of need?
It’s been more than four months since Hurricane Maria made landfall in Puerto Rico. No additional Medicaid funding has been approved for the territory. Nor has there been any action on achieving Medicaid equity over the short term or the long term.
Governor Ricardo Rossello and Resident Commissioner Jenniffer Gonzalez-Colon asked late last year for roughly $11 billion for Puerto Rico Medicaid funding post-Maria. This would cover the first 2 years at 100% matching (more than $6 billion) plus the next three years at the current funding level of $1.6 billion ($4.8 billion total).
U.S. Senators have also written to Senate leaders asking for additional Medicaid assistance for Puerto Rico. A coalition of economists and policy leaders wrote an open letter listing the requirements for rebuilding Puerto Rico, including Medicaid equity and disaster relief. Legislators and human rights organizations have been asking for Medicaid equity for Puerto Rico for years. Congress has the chance now to take action on this important matter.
Read the documents: