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Obama Administration Takes More Obamacare Benefits from Puerto Ricans After Gov’s Request

The Obama Administration acted questionably late last week to take more benefits of the 2010 healthcare law known as ‘Obamacare’ away from Puerto Rico and the other territories of the U.S.

Department of Health and Human Services (HHS) Centers for Medicare and Medicaid Services (CMS) Administrator Marilyn Tavenner wrote that healthcare insurers in the territories would no longer have to provide insurance to all who want it, meet minimum coverage requirements, or have their rates reviewed.

Government of Puerto Rico officials estimate that 282,000 Puerto Ricans lack health insurance.

Tavenner’s letter reversed repeated, previous HHS decisions that the law treated the territories equally with the States for these provisions.

A year ago, CMS Center for Consumer Information and Insurance Oversight Director Gary Cohen wrote that “In letters dated July 29, 2010 and December 10, 2012, HHS clarified that the insurance market reforms in … the Public Health Services Act (PHS Act), as amended by … the Affordable Care Act [one of the two Obamacare laws], apply to health insurance issuers in the territories because the definition of “State” in the PHS Act includes territories … HHS is not authorized to choose which provisions … might apply in the territories … HHS has no authority to exclude the territories.”

Cohen was responding to a unpublicized request from Puerto Rico Insurance Commissioner Angela Weyne that insurers not have to provide insurance to all Puerto Ricans who want it.

And Cohen warned Weyne that “if HHS determines” a “territory is not substantially enforcing the” insurance market reform “requirements, HHS has the responsibility to enforce these provisions” itself in the territory.

Disclosure of Weyne’s request by PUERTO RICO REPORT caused a scandal. Weyne defended herself by saying that Governor Alejandro Garcia Padilla (‘Commonwealth’ party) had approved her request. But Garcia had claimed that he supported Obamacare in its entirety and he had gotten elected criticizing his major opponent, then Governor Luis Fortuno (statehood), for supporting a change in Obamacare that would not have taken away benefits from Puerto Ricans.

Cohen noted that Fortuno and Puerto Rico’s representative to the Federal government, Pedro Pierluisi, who now heads the statehood party, had asked that Obamacare’s “insurance market reforms … apply to the territories” along with the governor of Puerto Rico’s neighboring territory of the U.S. Virgin Islands.

“HHS does not have authority to grant your request,” Cohen wrote Weyne. “HHS, at the request of and with the full support from the territories … confirmed that the … market reform provisions … including the guaranteed availability provision, are applicable in the territories,” he added.

Tavenner last week wrote that HHS would no longer treat territories equally with the States for Obamacare “PHS Act requirements and funding opportunities.” It is, instead, appropriate to interpret the law to only treat the territories as States for the provisions of the PHS Act that existed prior to Obamacare, she rationalized.

As of last year, Cohen wrote that, under treatment as a State, Puerto Rico had received $3 million from the Federal government to review insurance rates and $396,744 to provide advice for individuals buying insurance. Tavenner wrote that “territories will not have to pay back” funds already spent because of the new “interpretation” of the law but “all unspent grant funding must be returned to CMS.”

Weyne justified her exemption request by noting that Puerto Rico was left out of the Obamacare provisions requiring employers to provide health insurance and individuals who do not qualify for Medicaid government health insurance for low-income individuals or Medicare health insurance for older and disabled individuals to buy health insurance.

But Cohen pointed out that “Territories are free to establish their own … individual minimum coverage or employer responsibility mandates similar to those required” by Obamcaare.

HHS’ ‘interpreting’ the Public Health Services Act in the case of Puerto Rico and other territories as if President Obama’s signature achievement never became law not only reversed its own repeated decisions, it contradicted candidate Barack Obama’s promise to Puerto Ricans that they would be treated equally in his healthcare reform.

But, although Obama repeated that promise as President-Elect and President, his administration made no effort to apply benefits of the law as it was being written to Puerto Rico and other territories until Pierluisi confronted the President on the issue in front of other members of the U.S. House of Representatives Hispanic Caucus and Representative Jose Serrano (D-NY) prompted then House Speaker Nancy Pelosi to also press White House staff for a funding proposal for the territories.

Their efforts and those of Fortuno and others resulted in substantial but not equal funding. Obamacare allotted Puerto Rico a total of $925 million to subsidize the purchase of health insurance by middle-income Puerto Ricans for the six years from this year through 2019. Pierluisi, with the assistance of the respected Government Accountability Office (GAO), calculated that equal treatment with the States would provide the Commonwealth with $1.5 billion each year.

And, while funding for Puerto Rico in Medicaid was tripled to about $1 billion a year, GAO has estimated that equal treatment with the States would mean up to $1.415 billion a year more and an additional $1.5 billion a year more if Puerto Rico had in-patient facilities for long-term care.

The Federal government can treat the Commonwealth and individual Puerto Ricans far worse than a State and residents of a State because of Puerto Rico’s territory status.


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