Congress Must Step in to Fix Puerto Rico's Medicaid Crisis

04/26/2017 03:14 pm ET Updated Apr 27, 2017

As negotiators in Washington try to reach a deal to avoid a government shutdown, the White House and Congressional Democrats are locked in a battle over Obamacare subsidy payments.

This fight over subsidy payments is getting all the attention from the political press, but a major health care funding story that isn’t getting enough attention is Puerto Rico’s Medicaid situation.

As the Center for Budget and Policy Priorities explains:

Unlike the 50 states and the District of Columbia, Puerto Rico is limited to a low, fixed amount of federal Medicaid funding each year irrespective of its actual Medicaid costs. This is a major cause of Puerto Rico’s long-term budget troubles. The federal government generally pays a specified share of states’ total Medicaid costs (known as the federal Medicaid matching rate or FMAP). The regular matching rate varies by state based on per-capita income and averages 57 percent. Puerto Rico’s FMAP was 50 percent until 2011, when the Affordable Care Act (ACA) raised it to 55 percent. But for Puerto Rico (and the other territories), that rate applies only up to a very low capped dollar amount of federal Medicaid funding each year; Puerto Rico must cover all costs above the cap.
Under this cap, Puerto Rico’s effective matching rate — how much of its total Medicaid costs the federal government actually pays — has generally been between 15 and 20 percent. If there were no funding cap and Puerto Rico’s FMAP were based on per-capita income, the federal government would pick up approximately 83 percent of its total Medicaid costs.
Along with modestly raising Puerto Rico’s federal matching rate on a permanent basis, health reform provided a one-time Medicaid boost of about $6.4 billion available to be spent through 2019. But Puerto Rico is expected to exhaust those funds by the end of calendar year 2017, and up to 900,000 people in Puerto Rico — more than half of total Medicaid enrollment — could lose their health coverage when the funds run out.

Puerto Rico is facing an unimaginable economic crisis. The territory is $70 billion in debt and has a poverty rate of 45 percent. The territory’s median income is $18,928, compared to $53,657 in the 50 states and the District of Columbia. The misery of this crisis will be greatly exacerbated if Congress does not step in.

A bipartisan Congressional report on the crisis in Puerto Rico stated “If Congress does not enact legislation to avoid the impending Medicaid cliff, the consequences for the health care system in Puerto Rico are likely to be severe.”

In response to this crisis, 74 Members of Congress recently wrote to House Speaker Paul Ryan to bring legislation to provide Medicaid funding to Puerto Rico before current funding runs out. In the letter, the Members wrote:

While we believe that a long-term solution for Puerto Rico’s historically inadequate federal Medicaid funding is long overdue, we want to stress our support for an immediate short-term solution to ensure full fiscal year financing for 2018 to avoid the Medicaid cliff. It is time for Congress to act – and act soon – as Puerto Ricans have suffered far too long.

The people of Puerto Rico deserve Congress’s help. The Congressional Budget Office estimates that the cost of preventing Puerto Rico from tumbling over the Medicaid cliff is $28.2 billion over the next 10 years. Compare that cost with the estimated $3.6 trillion cost of Ryan’s proposed tax cut plan over the same 10-year time frame.

While Speaker Ryan seems focused on passing a massive tax cut and cobbling together some kind of Obamacare repeal and replace legislation that has the votes to pass the House, nearly one million people in Puerto Rico may lose access to health care.

The case for bringing legislation to the floor to fix Puerto Rico’s Medicaid shortfall is both moral and political. The moral case is clear. It could be dereliction of Congress’s duty to sit by and do nothing, while people in one of the nation’s territories are pushed deeper into misery.

Politically, this would be an easy bipartisan win for a GOP-controlled Congress and White House that seem unable to get any major legislation passed.

There are going to be plenty of partisan fights in the days, weeks, and months ahead, but Speaker Ryan should set those aside and work with members in both parties to get much-needed Medicaid relief to Puerto Rico sooner rather than later.

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