Mandated Report—Medicaid in Puerto Rico

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June 2019

Chapter 5 responds to a U.S. House Appropriations Committee request for an analysis of Medicaid in Puerto Rico. Puerto Rico’s Medicaid program covers almost half of the island’s population. Like state programs, Medicaid in Puerto Rico pays for important health care services to low-income children, adults, people with disabilities, and those over the age of 65. It is subject to most federal requirements and shares many of the same roles, responsibilities, and administrative structures as state Medicaid programs. Its financing structure, however, differs from that of programs on the mainland: Puerto Rico may only access federal Medicaid funds up to an annual cap, and is subject to a statutorily defined federal medical assistance percentage of 55 percent.

The Commission finds that the statutory financing arrangement for Puerto Rico’s Medicaid program has resulted in chronic underfunding of its Medicaid program. Medicaid spending is constrained to a greater degree than in any state, reflected, for example, in more limited benefit packages, lower eligibility ceilings, and lower provider payment levels. In addition, the territory has high rates of poverty and a weak economy, conditions that were worsened by Hurricanes Irma and Maria in September 2017. Reliable, sustainable access to care for the Medicaid population will likely require changes to the existing financing arrangement that provide a higher level of federal investment over a longer period of time than past interventions.

Chapter 5 provides background on Puerto Rico, the health of its population, and its Medicaid program, and analyzes historical, current, and future spending from variety of different policy perspectives. Because Puerto Rico’s Medicaid program is currently projected to exhaust its federal funds in March of 2020, the chapter also discusses implications of the upcoming fiscal cliff, including major cuts to benefits and enrollment if Congress does not provide the program with additional funding, and estimates of fiscal year 2020 spending under different scenarios.

Publication Type: Reports to Congress

From: June 2019 Report to Congress on Medicaid and CHIP

Tags: access, benefits, enrollment, federal financial participation (FFP), Federal Medical Assistance Percentage (FMAP), federal/state partnership, financing, spending