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Puerto Rico Zika Outbreak Highlights Island’s Medicaid Woes

Extra Obamacare funding could be depleted next year

Resident Commissioner Pedro Pierluisi introduced a plan to help Puerto Rico's Medicaid program.
Resident Commissioner Pedro Pierluisi introduced a plan to help Puerto Rico's Medicaid program.

Puerto Rico is facing three converging crises demanding congressional attention: hundreds of cases of Zika, a $72 billion fiscal disaster and growing financial concerns about its Medicaid program.   

As lawmakers consider a $1.1 billion package to combat the spread of the mosquito-borne Zika virus that causes birth defects, the territory’s longstanding problems with funding its joint federal-state health insurance program for the poor are coming to a head.  

Thomas Frieden, director of the Centers for Disease Control and Prevention, said on May 26 that the territory’s fiscal problems are affecting Medicaid and that the Zika outbreak is exacerbating the situation. At least 906 Puerto Ricans were infected with Zika as of last week, the CDC said.  

“Their Medicaid program has deep problems and is unable to pay physicians,” Frieden said. “One of the things that the [nonprofit] CDC Foundation is working on is a way to reimburse physicians for care they provide for women who choose not to become pregnant during this time. It’s making an incredibly difficult situation even harder.”  

Sara Rosenbaum, a health policy professor with the George Washington University Milken Institute School of Public Health, said in an interview that Puerto Rico’s issue with fighting Zika comes down to not having the capacity to provide prevention care and long-term contraceptives for women who haven’t yet been exposed. The program also has difficulties providing care and counseling for women who already have the disease.  


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Federal funding for Medicaid in Puerto Rico, unlike the rest of the United States, is capped.  

“This is like everyone’s worst nightmare about Medicaid in that it is a block grant,” Rosenbaum said. “The level of under-financing is incredibly severe and the money just remains frozen year after year.”  

Rosenbaum said that the island got an increase under the 2010 health care law, “but it’s nothing like what’s needed given the poverty of the population.”  

The health care law provided Puerto Rico an additional $6.4 billion in Medicaid funding until October 2019 and increased its federal match from 50 percent of funds to 55 percent. But less than half of that money is left and could be depleted as soon as mid-2017, according to the Centers for Medicare and Medicaid Services. For months, the Obama administration has urged that any measure that restructures Puerto Rico’s debt also deal with the Medicaid issue, but a bill set up for a House floor vote later this month provides no help on that front.  

Nearly half of Puerto Ricans receive health coverage through Medicaid, a much higher percentage than in the continental United States, in part because poverty and unemployment on the island is pervasive.   


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Since lawmakers so far have not included Medicaid funding in legislation to address the territory’s broader fiscal problems, Resident Commissioner Pedro R. Pierluisi, the non-voting representative of Puerto Rico in Congress, introduced a Medicaid bill last June. The bill would get rid of current funding limits and broaden the territory’s Medicaid program to cover beneficiaries up to 100 percent of the federal poverty level with the federal government providing enhanced matching funds.  

“If Congress does not appropriate additional funding to replenish the pool before it runs out, Puerto Rico’s annual Medicaid allotment from the federal government will revert to about $400 million a year, bringing us back to the dark ages,” Pierluisi said in a speech for the Puerto Rico Health and Insurance Conference on March 10.  

About 600,000 Puerto Ricans could lose coverage if federal funds decline, said Health and Human Services Secretary Sylvia Mathews Burwell earlier this year.   

“A true solution for the 3.5 million Americans living in Puerto Rico, including reforms to strengthen Puerto Rico’s Medicaid program, such as raising the federal share of Medicaid funding, requires Congress to act,” she said.  


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A House Democratic aide familiar with the issue said in an interview that the expiration of the additional funding under the federal health care law could cause a “humanitarian catastrophe” if thousands of Puerto Rico residents who need care are dropped from the program. The aide said it is important to deal with the issue soon as the territory’s managed care program will have a difficult time negotiating with providers if they do not know how much money they have.  

Evidence that Republicans fear having the bill tagged a “bailout” came in an amendment from Rep. Ruben Gallego, D-Ariz., that was added to the House bill when the Natural Resources Committee marked it up in late May. The amendment includes language that would allow a task force to study whether Puerto Rico could receive the same treatment under federal health care programs as states. Currently, the island is reimbursed at a lower rate for Medicare and Medicaid. The amendment squeaked by, 19-18, as Rep. Raul R. Labrador, R-Idaho, worried aloud about the financial implications.  

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