Puerto Rico’s already ailing health system took a huge hit when Hurricane Maria left 58 of the island’s 69 hospitals without power and fuel. But even when the hospitals are up and running again, the Puerto Rican government faces a crisis that could leave many islanders without health care coverage.
Puerto Rico’s Medicaid program—which covers nearly half of its population—was heading inexorably to a fiscal cliff in the coming months. Now experts warn that the U.S. territory could run through the program’s funding even faster.
“Right now people can’t get to their jobs because there’s no gasoline, and even if there was gasoline their jobs are likely not running because there’s no power,” said Maria Levis, CEO of Impactivo Consulting, who consults for health centers, hospitals, and insurers in Puerto Rico.
“People have lost everything,” she said. “The amount of people that are going to be eligible, of course, is going to increase.”
Puerto Rico’s Medicaid program is different from those of the 50 states. Its funding is subject to an annual cap that increases with overall inflation. Senate Republicans recently wanted to place per-capita caps on all Medicaid programs so they would grow at the same pace, but moderate Republicans and advocacy groups argued successfully that the proposal would cause a steep cut in the program.
Additionally, the amount of money Puerto Rico receives from the federal government for its program is fixed by statute rather than based on the average income per person. The Congressional Task Force on Economic Growth in Puerto Rico said in a December report that the federal match rate would be substantially higher for Puerto Rico if its funding were treated the same way as it is in the 50 states. (The matching statutory rate in Puerto Rico amounts to 55 percent for the program’s expenditures; if it were calculated on a per-capita basis, it would be 70 to 80 percent.)
The Affordable Care Act provided Puerto Rico with a one-time increase of $6.4 billion, but the task force’s report said this is expected to run out by the end of the year.
“Based on [the Centers for Medicare and Medicaid Service’s] projections, Puerto Rico’s supplemental funding will be depleted before the end of calendar year 2017, a date that has come to be known as the ‘Medicaid cliff,’” the report states. “Once Puerto Rico depletes this supplemental funding, it will revert to receiving only its annual capped federal Medicaid allotment, which is expected to be $357.8 million in Fiscal Year 2018.”
Puerto Rico largely escaped Hurricane Irma but was devastated by Maria. “Medicaid will be an important resource for people and the island as they try to recover,” said Barbara Lyons, senior vice president at the Kaiser Family Foundation.
Some advocates view Children’s Health Insurance Program legislation as one of the last ways to address the shortfall in Puerto Rico. CHIP funding expires this weekend, and Congress needs to renew the legislation to prevent some states from running through their resources by December.
“The reauthorization of the Children’s Health Insurance Program, a bill that also encompasses provisions to ensure care for the underserved, may be the last opportunity to avert the Medicaid Funding Cliff facing Puerto Rico,” argued an Impactivo Consulting issue brief released this month.
But so far it does not appear that Puerto Rico’s “Medicaid cliff” will be addressed in this legislation. Senate Finance Committee leaders reached an agreement last week to renew CHIP funding but did not include any provisions that address the territory’s problems.
Failing to replenish the depleted resources in the program could cause up to 900,000 people to lose their health coverage.
Last spring, Congress provided Puerto Rico with $296 million in Medicaid funding. The Puerto Rican government said this was about half of what it needs in order to provide coverage to its Medicaid-eligible population in the next fiscal year.
Now, Puerto Rico’s program will need even more resources to cope with the disaster left behind by the hurricanes, said Edwin Park, vice president for health policy at the Center on Budget and Policy Priorities.
Medicaid “is the lifeblood for the already struggling health infrastructure,” Park said. “You add on top the hurricanes knocking out many of these hospitals … this could push [the health care system] over the edge.”
A group of Senate Democrats wrote to President Trump on Wednesday detailing actions needed to address the crisis in Puerto Rico. They said dealing with the Medicaid cliff should be part of any emergency package.
The senators stated in the letter that after the Affordable Care Act supplemental funding is gone, “Puerto Rico will have to pay for the remaining amount out of its own pocket, which will be virtually impossible given the stressed state of the government’s finances, not even taking into account the effect of Hurricane Maria.”
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