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Puerto Rico Threatened by New Medicaid Cliff

When we talk about a government facing a cliff, we mean that the money funding the government’s costs will run out. In the case of Puerto Rico, Medicaid is expected to run through all available funding by September of 2019. According to the Department of Health and Human Services’ Office of the Assistant Secretary for Planning and Evaluation, 900,000 people in Puerto Rico could lose their Medicaid coverage in 2018.

Why is the money running out?

“The main issue is that we are not yet a state,” Jenniffer Gonzalez-Colon, Puerto Rico’s Resident Commissioner, told Kaiser Health Network. Puerto Rico has to fund medical care “with local funds that we don’t have.”

People’s eligibility for Medicaid depends on their income. Since Puerto Rico has a high poverty rate — higher than any state — nearly half the residents of the Island depend on the public health system. In states, the federal government pays a percentage of the costs of providing Medicaid-funded health care. Mississippi, for example, has 73% of its public healthcare costs covered by the federal government. Given Puerto Rico’s needs, the federal government would pay 83% of its healthcare costs if Puerto Rico were a state.

Since it is a territory, it is legal for Congress to treat Puerto Rico differently from a state. The Island is given a block grant, and the federal government pays about 57% of the costs until that money runs out. It is difficult for Puerto Rico to come up with nearly half the funds, but things get worse. In states, the federal government continues to pay a portion of the costs. In Puerto Rico, when that money runs out, the money is gone. The federal government pays nothing after that.

Higher expenditures after Hurricane Maria

While Puerto Rico always struggles to cope with the inequity in Medicare funding, this year has been worse than usual. Without electricity, medical facilities had to spend heavily on fuel to run generators.

It took nearly a year to get electricity back to all the residents of Puerto Rico. Drinkable water and food were not available for everyone, and healthcare was limited. Healthcare needs were greater than usual, and costs were greater.

Health challenges in Puerto Rico

Across the United States, people living in poverty often need more health care than more affluent people. In Puerto Rico, percentages of many chronic health problems are higher than in the states:

  • Almost 16% of Puerto Ricans have diabetes, compared with 13% in the United States as a whole.
  • More than 39% have high blood pressure, compared with 32% in the U.S. as a whole.
  • 17% have asthma, compared with 8% in the U.S. overall.

Since most costs in health care now come from chronic conditions of this kind, it is to be expected that Puerto Rico would need more federal support for medical care, not less.

Bills in Congress

While there have been some proposed amendments to Medicaid-related bills that could help stave off the Medicaid cliff, there are no current bills to address the basic inequity in Medicaid funding, except for HR 6246, the Puerto Rico Admissions Act. As a state, Puerto Rico would receive federal health care funding just as other states do.

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