Dysfunctions
Puerto Rico faces looming Medicaid crisis
By Nathaniel Weixel, The Hill, 7/10/17
Oct 8, 2017 - 10:06:41 AM

Puerto Rico is facing an imminent Medicaid funding crisis, putting nearly one million people at risk of losing their health-care coverage.

Even before Hurricane Maria caused major damage to the island’s struggling health-care system, the U.S. territory’s Medicaid program barely had enough money left to last through the next year.

Now, if Puerto Rico’s federal Medicaid funding runs out, up to 900,000 people would likely be cut from Medicaid — more than half of total enrollment, according to federal estimates.

Hurricane Maria made things substantially worse.

Experts predict that unless Congress acts, the federal funding will be exhausted in a matter of months. If that happens, Puerto Rico will be responsible for covering all its costs going forward.

“Unless there’s an assurance of stable and sufficient funding … [the health system] is headed toward a collapse,” said Edwin Park, vice president for health policy at the Center on Budget and Policy Priorities (CBPP).

Barbara Lyons, a senior vice president at the Kaiser Family Foundation, said this would mean major coverage reductions, increased problems for patients in accessing treatment and delays in payments to health-care providers.

A massive influx of Puerto Ricans could also migrate to the mainland, which would put a strain on the Medicaid programs of the states they move to.

Nearly half of Puerto Rico's 3.4 million residents participate in Medicaid.

Since it is a U.S. territory and not a state, Puerto Rico doesn’t receive nearly as much federal support as states do.

On average, the federal government covers 57 percent of a state’s Medicaid costs.

But residents of the territories don’t pay federal income tax; As a result, federal spending is capped and territories only get about 15 to 20 percent of their total Medicaid costs paid.

Experts say this formula has forced the Puerto Rican government to cover a large portion of the costs from its own budget, contributing to the island’s debt crisis.

“If they were treated fairly as other states, the federal government would reimburse them the same as other states,” said Lara Merling, a research assistant at the Center for Economic and Policy Research, a left-leaning think tank.

To help with the funding disparity, ObamaCare gave Puerto Rico a significant infusion, of about $6.5 billion, to last through 2019. In May, Congress appropriated an additional $300 million.

But those funds were already running low prior to Hurricane Maria, and the fallout from the storm has yet to be fully realized.

“People don’t have water, electricity … people are going to get a lot sicker,” Merling said.

As the economy and businesses struggle to get back up to speed, more people will also likely need Medicaid. Paying for those people could put additional financial strain on a system that’s already on the verge of collapse.

Congressional Democrats have urged President Trump to do more to help out Puerto Rico, with some criticizing a slower response compared with the hurricanes in Texas and Florida.

On Tuesday, Trump and other members of the Cabinet traveled to the island after a Twitter feud between the president and San Juan’s mayor.

While there, Trump made a reference to the island’s debt, which totals $74 billion, indicating it could complicate federal budget requests for disaster relief.

"I hate to tell you Puerto Rico, but you threw our budget a little out of whack, but that's fine," Trump said, according to a White House pool report.

Congress this week received a $29 billion request from the White House for disaster assistance, but none of it was earmarked for Puerto Rico’s Medicaid program.

House Energy and Commerce Committee Republicans have proposed giving Puerto Rico an additional $1 billion over the next two years as part of a must-pass bill to fund the Children’s Health Insurance Program (CHIP).

A GOP aide said the $1 billion is specifically meant to address the Medicaid cliff.

But Democrats have objected to the partisan way the GOP is trying to pay for the CHIP bill. Some of the offsets take aim at ObamaCare, putting the larger bill’s passage in jeopardy.

Rep. Frank Pallone Jr. (D-N.J.), ranking member of the Energy and Commerce Committee, told The Hill the legislation’s Puerto Rico funding is “woefully inadequate.”

CBPP’s Park said the House’s $1 billion proposal also doesn’t take into account the damage from Hurricane Maria. The island needs a much larger increase, he said.

But that will likely need to be paid for, as congressional Republicans are balking at passing any disaster relief without offsets.

Adding more uncertainty, the Senate has not given any indication if it will take up legislation to address Puerto Rico’s Medicaid cliff. The Senate Finance Committee passed its CHIP bill this past week, without any funding for Puerto Rico attached.