The NEXT Storm in Puerto Rico

In 2017, Puerto Rico had a very challenging year with both Hurricane Irma and Maria bombarding its shores. Just last month, Puerto Rico was spared a hit from Dorian. However, a major storm (of sorts) will be hitting Puerto Rico on September 30, 2019, regardless of what the weather says. On that day, the Section 2005 of the Affordable Care Act expires which provided PR with $5.4 Billion in Medicaid funding (from July 1, 2011 to September 30, 2019). If it were any other state of the United States, the expiration of this relief funding would not be such a challenge because of the current matching programs afforded to those states by the federal government. However, PR is unique in that it is only provided a block grant (i.e., a set amount of money) and that block grant is significantly lower than what other states get overall. Based on current estimations of costs in PR, the block grant funding will be exhausted by March 2020. At that point (well after hurricane season), PR will have to cover all costs for Medicaid for its citizens 100%. Why is that a problem?

In order to understand this, we have to look at PR’s healthcare system (removing the stress, strain, and destruction on the system delivered by Irma and Maria) in its base state. The public health care system in PR was privatized and now includes forced managed care participation. Of the 3 million citizens living in PR (which is on the decline), more than half are covered by Medicaid. The Medicaid eligibility limits in PR are much lower than other states ($6,600 in PR vs. $17,236) and with other states ability to expand coverage to 138% of the poverty line, PR can not go above 40% of the poverty line. This leaves a significant portion of the population ineligible. The cost of living in PR is actually higher than many mainland states while the average income is much lower. The per enrollee Medicaid benefit in PR is $2,144 compared with the lowest mainland state ($3,342) and the median state ($6,763) for projected 2020 budgets. If PR were afforded the same system of delegating funds from Medicaid to its enrolled citizens (i.e., matching based on income), the Medicaid matching rate would be 83%; however, because of the block grant the effective matching rate is between 15 and 20% for PR. Reimbursements for equivalent services in the mainland US are significant less in PR (for example, as low as $10 to a physician for an office visit). Unlike other mainland states, a US federal act (PROMESA) created an oversight board (FOMB) to manage the island’s finances and one of the main tools of the FOMB to control costs in PR has been to deeply cut Medicaid spending. 

Given that situation, it should not be surprising that prior to the 2017 crisis, healthcare professionals were leaving PR in large numbers and that trend increased after 2018. In an effort to stem this exodus, Act 14-2017 was enacted (February of 2017) which reduced certain physicians’ income tax in PR to 4% (down from 33%). This act went into effect in April of 2017 but data show physicians continue to leave, evidence that physicians value ability to care for their patients (i.e., resources to provide quality care) over their own income. Jennifer Gonzalez-Colon, the resident commissioner for PR (the only representative to Congress with limited voting rights and a marginalized role) introduced the Puerto Rico Integrity in Medicare Advantage Act in September of 2018 to stabilized Medicaid payments in PR following Maria (as an amendment to XVIII of the Social Security Act), which would have improved payments including to physician providers. The Act died in when the 115th Congress concluded in 2019 having never been enacted.

PR’s Medicaid program is, thus, in a crisis situation which will either need to be resolved before March 2020 or will result in potentially increased challenges (i.e., assuming additional healthcare professionals leave the island). With an already aging healthcare professional population (i.e., young professionals leave) and an aging population of patients, an enormous storm that has been brewing for years will be unleashed in the spring. The solution is for those controlling the healthcare finances of the island to create equitable systems of payment to support the US citizens of PR.

References

  1. Urban Institute Report – PR HC Infrastructure
  2. Revitalize Puerto Rico
  3. Judith Solomon on PR’s Medicaid Program
  4. Rick Shinto on Ending PR’s Health Care Crisis
  5. Caribbean Business June 2018 PR challenges
  6. Puerto Rico – Medicaid.gov
  7. Finding Health Insurance in PR
milner-small

-Dan Milner, MD, MSc, spent 10 years at Harvard where he taught pathology, microbiology, and infectious disease. He began working in Africa in 1997 as a medical student and has built an international reputation as an expert in cerebral malaria. In his current role as Chief Medical officer of ASCP, he leads all PEPFAR activities as well as the Partners for Cancer Diagnosis and Treatment in Africa Initiative.

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