“Chronicle of a disaster foretold” — an ominous phrase coined by author Gabriel Garcia Marquez that no longer characterizes a fictional novel, but a very real and terrible occurrence that may happen in Puerto Rico at the end of this year.
Puerto Rico is still recovering from the historic destruction caused by Hurricanes Irma and Maria and now, to add insult to injury, close to one million residents are in peril of losing their Medicaid coverage in 2019. A man-made, perfect storm that could impact not just Puerto Rico, but also states like Florida and other states where residents could potentially relocate to maintain their Medicaid coverage.
Citizens of the United States since 1917, the island’s residents are among the poorest in the nation, with 43.5 percent living below the federal poverty line, compared to 14 percent nationally. Those living under the poverty line are most reliant on public services like Medicaid.
Puerto Rico, with a total population of 3.4 million, covers 1.3 million residents under Medicaid at a total cost of $2.62 billion a year. If it were a state, the federal Medicaid reimbursement rate would cover most of the cost. But because Puerto Rico is a U.S. territory, it is ruled by discriminatory, archaic and unacceptable Medicaid rules that limit the federal funding the island receives to cover these U.S. citizens.
Unlike in the states, where federal Medicaid funding is not capped and the federal share varies based on states’ per capita income, federal funding for Medicaid in the territories is subject to a statutory cap and a fixed federal matching rate. Because of this, Puerto Rico’s Federal Medical Assistance Percentage (FMAP) is capped at 55 percent when it would be closer to 83 percent if it was calculated similarly to rates set for U.S. states.
Under these unequal, discriminatory regulations, Puerto Rico experiences a significant burden to cover its medically indigent. This steep fiscal burden has contributed significantly to Puerto Rico’s troubled fiscal situation, which helped lead to the government declaring bankruptcy. It also helps explain why health outcomes on the island are generally worse than in the states, with residents having higher rates of heart disease, diabetes and infant mortality.
Now these problems may become even worse. In February 2018, Congress approved additional funding for Puerto Rico through the Bipartisan Budget Act (BBA), which provided $4.8 billion for Puerto Rico. These relief funds expire at the end of September 2019, which means that just a few months from now, 900,000 Puerto Rican residents could lose their Medicaid coverage.
Not only would this be disastrous for those already struggling on the island, but it could also financially burden southern states like Florida and northeast states like Massachusetts, Connecticut, New York and Pennsylvania, where residents of Puerto Rico most commonly migrate. If health conditions continue to worsen on the island, residents will have no choice but to move to where they have historically sought better health services on the mainland.
This health-driven migration could cost about $9.7 billion for the federal government and $6.1 billion divided among various states. By comparison, the cost of providing these services in Puerto Rico would total less than $4 billion.
This potential mass migration is 100 percent preventable. Congress can act to immediately end the unequal funding of Medicaid for Puerto Rico and achieve stability in the island’s health care system.
Through legislative fixes, Congress can change the formula of how the cap is calculated by covering the cost of all residents at or under 100 percent of federal poverty level, as is currently applied to the 48 contiguous states and Washington DC. This is one of multiple solutions that could help stabilize Puerto Rico’s health care system, getting rid of the cap would go a long way towards increasing the island’s financial assistance and getting its residents back on their feet.
One way or the other, Congress will have to help Puerto Rico’s residents and provide them with the health services they need to thrive as part of our country’s essential fabric. If Congress does not act soon, the probable disaster of Puerto Rico’s Medicaid funding cliff will not be just for the island to bear alone.
Jaime R. Torres is the president of Latinos for Healthcare Equity and the former regional director of the U.S. Department of Health & Human Services, Region II, serving New York, New Jersey, Puerto Rico and the U.S. Virgin Islands.