Congress needs to enact a permanent, comprehensive Medicaid fix for Puerto Rico
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Think of one thing that scares you to your core. Whether it’s accidents or chronic conditions, anything that is detrimental to our health is usually among our biggest fears. Those fears are only compounded in the absence of vital health care.

For government, health is just as paramount, especially considering that healthier populations are extensively linked to better quality of life, higher productivity, and stronger economic performance. Most governments around the world dedicate substantial portions of their budgets towards health care. Such is the case with two of the United States’ major entitlement programs: Medicare and Medicaid.

But when it comes to Puerto Rico, the Medicaid program was conceived in inequity and born in neglect. For decades, Puerto Rico has received limited funding to run a bare-bones program that provides only 10 out of 17 mandatory services. These limitations are especially punitive for the 1.5 million U.S. citizens in Puerto Rico that depend exclusively on Medicaid for their health care. Moreover, these funding constraints have led to a massive exodus of medical providers who have left to seek better compensation elsewhere.

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Puerto Rico also must cope with ever-recurring funding cliffs caused by Congress’s unwillingness to provide adequate Medicaid resources on a consistent basis. Instead, U.S. lawmakers have hastily enacted legislative patches over the years to avert these cliffs, and in the process imperiled health care for hundreds of thousands of low-income families. These last-minute deals do nothing to prevent future cliffs, and ignore repeated calls to permanently support Puerto Rico’s medically underserved population.

The short-term CR maintains current levels of Medicaid funding for Puerto Rico until November 21. That’s eight more weeks to cover program expenses while lawmakers hammer out a longer-term fix, right as Puerto Rico is negotiating health care contracts with managed-care organizations. Imagine sitting at a table and negotiating with someone that has no idea how much money they can afford to pay you. The challenges created by uncertain funding cannot be understated.

At the end of the calendar year, all sources of supplemental Medicaid funds for Puerto Rico will expire. without additional funding from Congress, hundreds of thousands of families would kick off the new year devoid of vital health care coverage.

To avoid that scenario, this summer the House Committee on Energy and Commerce passed a bipartisan bill to provide Puerto Rico with a new financing structure and increased accountability measures. To be sure, the bill is not a permanent solution but it does set the stage for one by providing slightly higher-than-average Medicaid allocations and other much-needed resources. 

Unfortunately, actions from the Senate are not as positive—Senate Republicans have already signaled their general dissatisfaction with Puerto Rico’s Medicaid program through a letter to the Department of Health and Human Services’ Secretary Alex Azar. Among several queries, Republican members of the Senate Finance Committee asked Azar about the annual total dollar amount of Medicaid spending for Puerto Rico since fiscal year 2014.

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Leading questions will yield leading answers. Yes, it’s true that the U.S. has increased spending for Puerto Rico’s Medicaid program over the past five years. But those numbers alone are inflated and lack context. A revision of the last ten years shows that Congress has been appropriating temporary lifelines to avoid a total system collapse. These short-term extensions have artificially increased total Medicaid spending in Puerto Rico and raised the percentage of federal matching dollars, known as the Federal Medical Assistance Percentage (FMAP).

Instead of looking at funding since 2014, we must examine the underlying structure of the program to fully understand the systemic faults. Puerto Rico’s FMAP, for instance, is arbitrarily capped at 55 percent. If it were calculated using the same formula applied to the states, Puerto Rico’s share would be 83 percent. This limitation alone severely constrains delivery of the program, as evidenced by lower eligibility levels, fewer mandatory benefits, lower provider payments, and lower spending per enrollee. But Puerto Rico’s funding pool is also capped, as opposed to that of the states, which is open-ended. This combination means Puerto Rico’s effective FMAP was far less than 55 percent; in fact, much closer to 15 percent.  

Looking at dollar amounts since 2014 will only provide a distorted, superficial answer that will then lead to yet another distorted, superficial fix. Congress must focus on providing long-term Medicaid financing for Puerto Rico; not only because so many families depend on it, but also because it’s the fiscally responsible policy – based on the widely-accepted premise that prevention and early intervention substantially reduce long-term health care expenses.

Congress: stop nickel-and-diming Puerto Rico’s Medicaid program. Enact a permanent, comprehensive fix.

Rosanna Torres is director of the Center for a New Economy’s Washington, D.C. Office.