Trump Budget Increases Puerto Rico Medicaid by $600 Million

President Trump’s Fiscal Year 2018 Budget proposal to increase Medicaid funding for Puerto Rico – which would essentially enable spending to continue at the current level – was a surprise that raises bigger questions.

The proposal calls for Medicaid funding of $1,592.694,000 during the year that begins October 1st compared with spending this year of 1,631.834,000 — but current law would have only provided roughly $1 billion next fiscal year, so the $1.5 billion figure actually represents about $600,000 in increased Medicaid spending for the fiscal year 2017-2018.

Medicaid funding for Puerto Rico has been expected to fall as the $6.4 billion in supplementary funding made available in the Affordable Care Act is fully spent – a dynamic that has come to be known as Puerto Rico’s “Medicaid Cliff.”

Just weeks ago, the President strongly and loudly opposed a funding hike of $295.9 million for Medicaid in Puerto Rico that became law and brought the total available under current law for the next fiscal year to the $1 billion vicinity. The President opposed the congressional initiative for the $296 million in two tweets and an interview with a reporter. His Office of Management and Budget opposed it in a formal Statement of Administration Policy on the bill.

The opposition was not just to spending money. Trump objected to it on the grounds that it was a “bailout” for the territory, which is expected to spend down Medicaid money intended to last through 2019 by the end of this calendar year and which had suggested higher bond recoveries for creditors if Medicaid funding were continued at the current level. The policy statement issued by the President’s Office of Management and Budget said that the islands’ Medicaid program needed to be reformed and its “dire fiscal situation” should be helped with unspecified — and unmade — “pro-growth policies” instead.

The reason(s) for the dramatic about-face are unknown, although Secretary of Health and Human Services Tom Price said shortly before the President’s first tweet that the territory needed $900 million more for Medicaid next year – without saying that this should be federally-funded in the cost-shared program.

Also unknown is whether the Trump Administration wants the increase to current funding to be on-going after FY 2018.

Puerto Rico is expected to lose close to $400 million in federal funding under the White House budget for 2018, but the Medicaid program will, if Congress acts as the Trump budget requests, keep Medicaid funding at current levels even after Affordable Care Act funds run out.  The President’s budget calls for a $20,000,000 cut to Puerto Rico’s Nutritional Assistance Program, a $123,000,000 reduction to housing programs, and the elimination of the Community Development Block Grant program which would bring Puerto Rico about $53,700,000.

Governor Ricardo Rosselló has emphasized that healthcare support for Puerto Rico has to be resolved in order for the territory to overcome its fiscal dilemma. Puerto Rico receives far less federal healthcare support than a State with the same population would, and this inequity has been part of the problem the Island’s lack of resources. Rosselló intends to visit Washington next week to discuss these issues.

 

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