Medicaid Inequity in Puerto Rico Continues

Rep. Darren Soto (D-FL) wrote to the PROMESA Fiscal Oversight and Management Board (FOMB) last month, expressing concern over the unequal treatment Puerto Rico receives under Medicaid. The Board responded, thanking Soto for advocating for Puerto Rico and providing a list of proposed solutions to the problem.

Puerto Rico, like States, is responsible for the medical care of residents eligible for Medicaid. Like States, Puerto Rico receives reimbursement for part of these costs from the federal government.

However, Puerto Rico receives much less than a State would. First, the reimbursement is a smaller percentage of the total cost than a State would receive. Second, there is a cap on Medicaid payments to Puerto Rico, regardless of the costs the territory faces.  One implication of this lesser funding is that the basic benefits package for Puerto Ricans is only a portion of what state-based U.S. citizens receive.  There is also less funding available to cover the costs of benefits that the plan officially offers.

Puerto Rico received an additional temporary grant last year, but, as FOMB  acknowledged in their recent letter, that funding will expire in September 2019. As the FOMB further explained, “[w]ithout a change in federal law, next year Puerto Rico will revert back to the statutorily capped federal funding that it receives for Medicaid, which is a small fraction of what similar states receive. Not only does Puerto Rico have a predefined 55% as its federal matching assistance percentage, but also Section 1108 of the Social Security Act imposes an additional hard, lower cap on Puerto Rico’s Medicaid share.”

The FOMB went on to share these points:

• The current temporary additional grant ends in September; 2019.
• The program cost more than $2.8 billion in fiscal year 2018.
• Permanent Federal funding for the year was just under $360 million.
• Local spending for the program would be 23% of the territorial budget in fiscal year 2021 under current law and the Board’s Fiscal Plan for the territory.

The letter further said that The Board estimated that the Federal contribution would be $1.3 billion if there were no cap, and $1.8 billion if Puerto Rico received the 76% funding of the State with the lowest per capita income, Mississippi. If Puerto Rico were a State, federal Medicaid reimbursement would certainly equal the percentage paid to Mississippi, and there would be no cap.

“Each dollar that the federal government does not provide for Medicaid,” wrote the FOMB, “the Government of Puerto Rico must find while it contends with the devastating aftermath of hurricanes Irma and Maria and attempts to resolve its crushing debt burden.”

FOMB underestimates inequity

It is clear that the FOMB letter is intended to make it clear that Puerto Rico is in a bad position when it comes to Medicaid.

But things are actually worse than the Board suggests.

State Medicaid programs provide a wide array of services; 17 of those services are mandatory. Puerto Rico’s Medicaid program provides just ten of those services. Non-emergency transportation to medical facilities is not offered in Puerto Rico, for example.Nor are emergency medical services for non-citizens offered, nor nursing facility services. Government sources explain that these “mandatory” services are not provide because the territory cannot afford the cost and/or does not have the needed infrastructure.

If Puerto Rico were a State, the mandatory services would all have to be provided, and the federal government would have to provide the funds needed.

In addition to the mandatory services, there are optional services which nearly all States provide. Puerto Rico would probably require funding for some or all of these services as well.

What’s more, the percentage reimbursed by the federal government would be the maximum 82%, rather than the 76% Mississippi receives. The program in Puerto Rico has received increases during most years, too. Any additional funds Puerto Rico is able to acquire will be reimbursed at the 55% rate — with the cap in place.

Experts estimate that Puerto Rico’s Medicaid program would receive $3 billion, if Puerto Rico were a State. If Puerto Rico develops a nursing home plan for its aging population, the total would be nearer $4.5 billion.

Lack of representation

Congress is not legally required to treat Puerto Rico fairly, compared with the States. Puerto Rico, since it is a territory and not a State, has no senators and only one non-voting member of Congress. Without much direct representation in Congress, Puerto Rico has to rely on representatives from the States.

Soto represents more people of Puerto Rican origin than any other Member of the U.S. House. At last count, 22.4% of his constituents were of Puerto Rican heritage. His father was born in Puerto Rico.

Read the FOMB Response to Congressman Darren Soto