Congressmen came to an agreement on Tuesday to fund Puerto Rico’s Medicaid program in a way that prevents it from running out of federal funding by the end of the year and guarantees stable funding for the following five years.
Consistent funding is essential for the US territory due to the manner in which funds are allocated.
Puerto Rico’s Medicaid Program
Puerto Rico and other US territories receive a fixed amount of funding, or allotment, with a spending cap that can fall far short of expenditures. This is in contrast to the states, where Medicaid funding is unlimited and can more easily adjust to the needs of the population during a crisis.
More than one million low-income Puerto Ricans are at risk of losing healthcare coverage or experiencing severe reductions in benefits if federal Medicaid funds are exhausted.
Legislators reached the agreement as part of an omnibus appropriations bill that seeks to fund government programs and operations through the end of this fiscal year, which ends in September 2023.
Over the next five years, Puerto Rico would receive over $17.6 billion in Medicaid funding. The bill also addresses another funding issue: the federal government’s share of Medicaid costs paid to Puerto Rico.
In 2019, the federal government covered 55 cents of every dollar spent by Puerto Rico on Medicaid, compared to 76 cents in Mississippi, despite the fact that the poverty rate in Puerto Rico is double that of Mississippi the poorest state.
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Annual Funding
Based on the Centers for Medicare and Medicaid Services’ interpretation of the Medicaid funding cap provision, Puerto Rico has received approximately $3 billion annually for its Medicaid program since the beginning of the pandemic. This was significantly greater than the estimated $400 million they were originally slated to receive based on pre-pandemic levels.
The bill proposes an allocation of $3.28 billion for Medicaid for the current fiscal year, $3.33 billion for the fiscal year 2024, $3.48 billion for the fiscal year 2025, $3.65 billion for the fiscal year 2026, and $3.83 billion for the fiscal year 2027. According to the office of Senator Menendez, the increases over the five-year period compensate for inflation costs.
If the bill fails to pass or the Centers for Medicare & Medicaid Services’ interpretation of the Medicaid funding cap provision is reversed, Puerto Rico’s Medicaid allocation could plummet to around $400 million in the following year.
Republicans have rejected the Centers for Medicare and Medicaid Services’ interpretation of an increase in Medicaid funding for the territory, citing a report from the nonpartisan Government Accountability Office that states the nearly $3 billion allocation for the fiscal year 2022 “was not authorized.
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