Puerto Rico and other territories left out of healthcare reform

Healthcare is becoming an increasingly contentious issue between Democratic leaders and Hispanic lawmakers who feel that many Hispanics are being left out of the reform efforts.

The latest disagreement splits powerful committee chairmen and Hispanic lawmakers over the issue of whether healthcare reforms apply to the 4 million American citizens in Puerto Rico, which is predominantly Hispanic.

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A new bill unveiled by Senate Finance Committee Chairman Max Baucus (D-Mont.) raises questions about whether Puerto Ricans will be able to participate in a health insurance clearinghouse intended to reduce costs for Americans living in the 50 states.

Complicating the issue for Baucus and Democratic leaders are the promises President Barack Obama made to Puerto Ricans during the 2008 Democratic presidential primary. While campaigning on the island for Democratic delegates, Obama promised that Puerto Ricans would receive equal healthcare assistance.

Obama lost Puerto Rico’s primary to Hillary Rodham Clinton, but advocates of Puerto Rico say he still has to make good on his promises, which he reiterated in a Jan. 2 letter to Governor-elect Luis Fortuño.

“During my campaign, we pledged to seek equal coverage of Puerto Rico in federal healthcare assistance programs,” Obama wrote earlier this year. “Although it may take some time to implement all of these proposals, Puerto Rico deserves no less.”

Americans living on Puerto Rico do not pay federal income tax, so some conservative-leaning members of Congress argue that they do not deserve full healthcare benefits. But proponents of equality for Puerto Ricans, such as Sen. Robert Menendez (D-N.J.) and Reps. José Serrano (D-N.Y.) and Luis Gutierrez (D-Ill.), argue that many Puerto Ricans have fought and died for the United States in wartime and are just as American as anyone else.

"Excluding the residents of Puerto Rico from a health care bill -- or any bill -- that is intended to protect our families is an outrage and demonstrates the kind of hypocrisy that makes people resent Washington," Gutierrez told The Hill. "We owe more to our country and more to the Latino population, which is increasingly being pushed out of health care reform. When we effectively bar any population from buying private insurance from the exchange, we relegate them to emergency room care at the highest cost to taxpayers.

The dispute also affects the other U.S. territories: Guam, the Northern Mariana Islands and the Virgin Islands, which have a total population of half a million. Residents of those territories likewise will not receive the same healthcare reform benefits as Americans living in the continental United States, Alaska and Hawaii.

Under Baucus’s plan, which the Senate Finance Committee will begin marking up on Tuesday, residents of Puerto Rico and these other territories would face higher barriers to enrolling in Medicare Part B, which covers non-hospital medical services. The legislation would also provide lower Medicaid reimbursements to Puerto Rico and the territories.

Baucus’s bill would increase Medicaid payments to Puerto Rico by 30 percent a year from 2011 to 2019 over the next nine years, but advocates say that provides little consolation because the federal Medicaid match is so low right now. One expert said the total increase would amount to only $1 billion.

“Sen. Baucus is working to balance all of the concerns that need to be addressed in health reform, while at the same time crafting a bill under $900 billion,” said a Finance Committee aide. “He included an increase in the Federal Medical Assistance Percentage (FMAP) and an increase in the existing spending caps for all territories, including Puerto Rico. And he’s pledged to work to improve the bill throughout the legislative process.”

Legislation reported by the House Energy and Commerce Committee does not guarantee that Puerto Ricans and residents of other territories will be able to participate in the healthcare exchange, which is supposed to lower costs by giving participants a choice of many competing plans.

“That’s not equality,” said Serrano, who was born in Puerto Rico and moved to the mainland as a young child. “The president and the Democratic leadership should stop saying that we’re giving healthcare to all Americans.”

The disparity led to a tense exchange between Serrano and Energy and Commerce Committee Chairman Henry Waxman (D-Calif.).

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Serrano approached Waxman recently to ask if Puerto Rico would be treated the same as the rest of the country in the healthcare reform package.

Waxman said, “No, we don’t have the money.”

“I told him that was the wrong answer,” Serrano recalled.

It is estimated to cost about $10 billion to include Puerto Rico and the territories in the exchange.

Serrano says that when House Democrats took up healthcare reform, they decided they would write a bill that met their expectations of fair reform and then weigh its cost — not pick and choose provisions that could fit under an arbitrary price tag.

Serrano and other members of the Congressional Hispanic Caucus wrote a letter to Speaker Nancy Pelosi (D-Calif.) at the end of July pressing the issue.

“Regardless of how difficult or tempting it may be to cut the territories out of this health reform, it simply cannot happen,” they wrote. “It is our moral obligation to provide residents of the U.S. territories with the same opportunities as everyone else.”

Gutierrez, Rep. Nydia Velázquez (D-N.Y.) and Resident Commissioner Pedro Pierluisi (D) of Puerto Rico also signed the letter.

Pierluisi said in an interview that he and his staff have had several conversations with the House Democratic leadership and Waxman to improve treatment for Puerto Rico. As a result of that campaign, he said, he is confident that the House bill will include Puerto Rico and the territories in the exchange.

Advocates are more worried about the Senate Finance Committee bill. They are counting on Menendez and Sen. Charles Schumer (D-N.Y.) to lean on Baucus, who has very few constituents of Puerto Rican heritage in his state.

Menendez, Schumer and Sen. Jeff Bingaman (D), who represents New Mexico, a state that is 42 percent Hispanic, will offer an amendment to the Finance bill allowing Puerto Rico and the territories to participate in the health insurance exchange, according to Pierluisi.

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Menendez and Schumer will also offer an amendment to make it easier for Puerto Ricans to enroll in Medicare Part B, Pierluisi said. Elderly residents of the island are not automatically enrolled in Part B, unlike those living in the 50 states. The amendment would also increase federal Medicaid payments to Puerto Rico.

Menendez has also brought up the sensitive issue of providing healthcare assistance to illegal immigrants. Menendez has said he is concerned that Baucus’s bill would not allow illegal workers to buy health insurance through an exchange, depriving them of the cost savings of increased market competition.

Menendez has also criticized the way Baucus would treat families of mixed immigration status. A family with a member or members who are not legal residents would receive lower federal subsidies than all-legal families.

Menendez is a member of the Finance Committee, and his vote could decide whether the bill passes because Sen. Jay Rockefeller (W.Va.), the second-ranking Democrat, has already vowed to vote no.

The National Hispanic Leadership Agenda, a coalition of Hispanic groups including the National Puerto Rican Coalition and the Hispanic Federation, have called for equal treatment of Puerto Rico in the healthcare reform package. Those groups have met with White House officials and members of Congress to press their arguments.

“What’s happening is that because Puerto Ricans are not getting funding and quality healthcare, they are moving to states such as Florida and Connecticut and burdening those systems,” said Rafael Fantauzzi, president of the National Puerto Rican Coalition.