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Future of Medicaid in Puerto Rico Is Uncertain

Medicaid in Puerto Rico is subject to a paradox: with much higher rates of both poverty and chronic disease than any state, Puerto Rico needs Medicaid more than the states, yet receives less. This is one of the main factors threatening Puerto Rico’s economy. The territory’s government is required by law to provide certain services, just like the states, but the federal government doesn’t pay for them the way it does for the states.

Medicaid funding in Puerto Rico has a cap, while funding the states is based on need. Also, federal funding is reimbursed in states at as high a rate as 83%, but in Puerto Rico the baseline is set at 55% — and in practice, unless Congress acts to the contrary, is often less.

The formula to determine reimbursement is called the Federal Medical Assistance Percentages (FMAP). The federal government made some extensions of Medicaid funding for Puerto Rico during the pandemic, including an increase of the FMAP to 76%, but these allowances are scheduled to end in December 2022. There cost for the territorial government would exceed $500 million each year.

That puts Puerto Rico once again on a Medicaid cliff. Congress routinely makes temporary emergency allocations for Medicaid in Puerto Rico, but so far has not made long-term changes. Uncertain funding makes it impossible for medical facilities in Puerto Rico to make plans, to negotiate better pricing with vendors, or to keep personnel who can simply move to a state for better positions.

Congress expresses support

Many in the House and Senate have spoons up for better Medicaid funding for Puerto Rico.

“Our fellow Americans in Puerto Rico have already lost so much amid the devastation of Hurricanes Fiona and Maria; they shouldn’t have to worry about losing access to Medicaid too,” said Sen. Marco Rubio (R-FL). “It’s time to secure a long-term, sustainable solution to this critical problem. I am committed to working with my colleagues to get it done.”

Senator Bob Menendez (D-NJ) recently prevailed upon Congressional leaders to increase Puerto Rico’s FMAP, at least in the wake of Hurricane Fiona.  He was joined by Sens. Elizabeth Warren (D-MA), Bernie Sanders (I-VT), Cory Booker (D-NJ), Ben Ray Luján (D-NM), Richard Blumenthal (D-CT), Edward J. Markey (D-MA), Mazie K. Hirono (D-HI), Kirsten Gillibrand (D-NY), Martin Heinrich (D-NM), and Dianne Feinstein (D-CA). The letter was also signed by Reps. Nydia Velázquez (D-NY), Adriano Espaillat (D-NY), Gwen Moore (D-WI), Sylvia Garcia (D-TX), Nanette Diaz Barragán (D-CA), Grace Meng (D-NY), Raúl M. Grijalva (D-AZ), Darren Soto (D-FL), Alexandria Ocasio-Cortez (D-NY), Joe Morelle (D-NY), and David Cicilline (D-RI).

“At the very least,” they wrote, “Congress should again temporarily increase the FMAP to 100%, to provide medium-term predictability for Puerto Rico and to reduce fiscal pressures that will undoubtedly be worsened by Hurricane Fiona’s fallout. In the longer term, Congress must act to increase Puerto Rico’s FMAP permanently—a step necessary to enabling Puerto Rico’s Medicaid program to plan coverage for services like long-term care.”

Read the letter.

The Congressional Research Service recently reported on Medicaid in the territories, providing details on the circumstances described above and concluding that “Federal Medicaid financing for the territories is uncertain for FY2023 and subsequent years.”

Read the report.

Support outside of Congress

The Partnership for Medicaid, an alliance including organizations from the American Academy of Family Physicians, the American Academy of Pediatrics, and the American Dental Association to Easter Seals and the National Hispanic Medical Association, wrote to Congressional leaders to express hope “that Congress will work to pass legislation to finally address the longstanding inequities in Medicaid affecting the territories.”

Outlining the negative effects of the current Medicaid inequity, the Partnership wrote, “[A}ddressing the Medicaid funding limitation in the territories will help advance health equity and aim to correct longstanding disparities in health. The unequal treatment of Americans residing in the territories, of whom 98% are racial or ethnic minorities, is only exacerbated by the capped Medicaid funding which deprives some of the most marginalized populations of the federal support their counterparts living stateside enjoy. We hope that Congress moves to enact policies to promote health justice and advance health equity for Americans in the territories.”

Read the letter.

With support both inside and outside of Congress for repairing the unjust Medicaid differences in the territories, it is possible that the problem will be solved, at least temporarily. It will require action by Congress, though — and soon.

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