Medical care in the United States is expensive, compared to other nations. A study from the Johns Hopkins Bloomberg School of Public Health, published in Health Affairs, found that Americans spend $9,892 per capita on healthcare costs each year, more than any other country in the world. This is not simply because Americans get more access to healthcare or take better care of themselves than people in other countries. At some level, health care in the U.S. just costs more.
This leaves many Americans unable to cover the costs of the healthcare they need. Medicaid is the federal government’s program for covering necessary health care expenses that patients cannot afford for themselves. Medicaid covers nearly 74 million Americans.
In Puerto Rico, where the poverty level is higher than in any of the 50 states, nearly half of all residents are eligible for Medicaid. But Puerto Rico actually receives far less federal funding as a territory than it would as a State.
Medicaid rules are different in Puerto Rico
Congress has recently held two hearings on Medicaid in U.S. Territories. The first hearing was about the Medicaid cliff expected in September, when certain federal funds will run out. Several weeks ago, Rep. Gregorio Kilili Camacho Sablan of the Northern Mariana Islands, vice chair of the House Natural Resources Committee for Insular Affairs, invited representatives from five U.S. territories, including Puerto Rico, to explain how inequities in Medicaid affected their healthcare programs.
A second Medicaid hearing in the House of Representatives was held last week, providing Members of Congress who serve on the Health Subcommittee of the Energy and Commerce,Committee a chance to learn about and consider solutions to the upcoming Medicaid cliff.
Rep. Ben Ray Lujan (D-NM) said the funding level in the territories is “not only unacceptable, it is inhumane.” He noted that many people will lose coverage if the Medicaid cliff occurs and emphasized that “these are our fellow Americans.”
Health Subcommittee Chair Anna Eshoo (D-CA) expressed an intention to take action. “I look forward to this Committee solving this once and for all,” she said. “No more Band-Aids.”
Medicaid is simple in the States. A State spends what it needs to in order to provide healthcare to its needy residents. The federal government reimburses a percentage of the costs, based on the average income in the State, up to 83%. So a poor state could receive $83.00 from the federal government for every $100.00 in costs. If the needs rise, perhaps because of a natural disaster or a fiscal crisis, the funds also increase.
In Puerto Rico, the federal government officially matches just 55%. Yet there is also a cap: a limit in funding over which the territory receives nothing. So Puerto Rico receives 55 cents for every dollar spent, until the cap is reached, after which they receive nothing. This means that the actual match is much lower than 55%.
Without congressional action, Puerto Rico’s FMAP will be 30% in FY2020 and 13% in FY2021, a huge difference from the 83% it would receive as a state.
There have been a variety of extra funding bills for healthcare over the years, but all extra funds will be used up by September 1st. As many as 900,000 people could lose their access to healthcare at that time.
Puerto Rico also has special needs
Puerto Rico has not fully recovered from Hurricane Maria in 2017. Rural areas are often hard to reach. Doctors have been leaving the Island for years, and hospitals are not all back to their full strength. Access to healthcare continues to be problematic. Darren Soto (D-FL) said that 6,000 doctors have left the Island. Part of the reason is the low level of payment for doctors. Lack of funding therefore adds to the problem of healthcare access.
Angel Avila, Executive Director, Puerto Rico State Health Insurance Administration, testified that the actual matching rate in Puerto Rico is much lower than the statutory 55%.. Already, prescription drugs take up 30% of the Medicaid funding received (compared with 5% in the U.S. overall).
Like other geographic areas with high poverty rates, Puerto Rico has higher rates of chronic diseases such as diabetes. About 16% of adults in Puerto Rico have diabetes, compared with less than 10% in the U.S. as a whole. Puerto Rico also has higher rates of heart disease and infant mortality. It is a case of a population with higher needs, but significantly lower funding, than in the 50 States.
Higher costs for the United States
People born in Puerto Rico are U.S. citizens and can move freely among the 50 States. Already, a need for health care is a common reasons for leaving Puerto Rico.
People moving, for example, from Puerto Rico to Florida will immediately be eligible for additional Medicaid funding. They will receive more benefits than they did in Puerto Rico until they have increased their income beyond the Medicaid boundaries. The State of Florida will have to pay the costs, and the Federal government will have to cover its matching payment.
It is well known that keeping up with preventive care reduces health care costs in the long run. For Puerto Rico, failing to cover the cost of preventive care leads to more serious health issues, for which the States will ultimately have to pay. Resident Commissioner Jenniffer Gonzalez-Colon made this point in the hearings.