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Puerto Rico Taxes to Help State Residents Get Federal Aid Not Available in Territory

Taxes paid by residents of Puerto Rico are being used to assist residents of a State  in obtaining new Federal subsidies for healthcare insurance not available to residents of the territory.

Middle-income residents of States are eligible for the new subsidies. The Puerto Rico Federal Affairs Administration’s Orlando, Florida office has been helping Floridians register for the assistance provided by the 2010 Federal healthcare system reform, according to the agency’s Director, Juan Hernandez Mayoral.

The office and its staff will concentrate the effort for six hours today, Hernandez said in a news release.  Insular government resources have been dedicated to it for several days.

The new Federal healthcare insurance exchange program is paying part or most of the cost of insurance premiums for residents of States earning from 100% to 400% of the Federal poverty level.  In 2014, this is from $11,670 to $46,680 in the case of an individual, with $4,060 to $16,240 more for each additional family member.  So, for example, families of four with incomes between $23,850 and $95,400 can receive the subsidies.

The Government of Puerto Rico is struggling with an enormous debt and a crippling annual budget deficit.  To reduce the deficit to $820 million during the fiscal year that ends June 30th, the Government raised taxes for the year $1.38 billion last year and has just cancelled a 7% to 6.5% reduction in its sales tax scheduled for this month.  The deficit is expected to be made up by borrowing that will cost the Government more to pay back.

The Federal healthcare system reform law included just $925 million for middle-income insurance premium subsidies in Puerto Rico from this year through 2019.  It has been estimated that subsidies would cost $6.75 billion over the six years.

Because Federal policymakers recognized that the $925 million would not be sufficient to pay for the subsidies, the law permits the Government of Puerto Rico to use the money for its Medicaid program, which pays for healthcare for low-income individuals and families.

Since the insular government does not even provide healthcare for all individuals and families earning less than the amount needed to qualify for the subsidies in the States because of a lack of funding, it is using the $925 million for its low-income healthcare program.  The program also receives a much smaller financial contribution from the Federal government than the Medicaid programs of the States.

The Federal middle-income subsidy program was created to insure as many individuals who lack healthcare insurance or adequate insurance as possible.  Of some 282,000 Puerto Ricans who did not have insurance during the last quarter of last year, only 1,882 have obtained coverage through an alternative subsidy program created by the administration of Governor Alejandro Garcia Padilla (“Commonwealth” party), newspaper El Nuevo Dia reported yesterday.  Garcia aides earlier estimated that 130,000 people would be covered by the end of the six-month period that ends March 31st.  

Puerto Rico can constitutionally be treated unequally in Federal programs because it is a territory and because territories cannot have voting representation in the Federal government.
















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