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Puerto Rico’s Oversight Board Certifies Fiscal Plan: What are the Implications for Medicaid?

By admin | April 27, 2018

April 24, 2018 Edwin Park

As I have previously written, a robust and resilient Medicaid program is essential to Puerto Rico’s long-run recovery from the devastation of Hurricanes Maria and Irma.  Its residents disproportionately rely on Medicaid for their health coverage due to their low incomes and relative lack of access to private insurance.  For example, 62 percent of children in Puerto Rico — and 48 percent of its residents overall — were enrolled in Medicaid in 2016.  Moreover, after the hurricanes, there is a significant risk that more residents of Puerto Rico will likely become eligible for Medicaid in coming months — offset to some degree by the effects of overall population decline due to outmigration — and the average medical needs of beneficiaries may also increase.  Congress recognized the important role Medicaid is playing in the post-hurricane recovery by enacting critically needed temporary financial assistance for the Medicaid programs of Puerto Rico and the U.S. Virgin Islands as part of the Bipartisan Budget Act of 2018 in February.

On April 19th, the Financial Oversight and Management Board of Puerto Rico certified the Commonwealth of Puerto Rico’s fiscal plan, which includes a major overhaul of the island’s Medicaid program Mi Salud.  While much of the fiscal plan’s Medicaid provisions focus on delivery system reforms to improve quality and lower costs as well as lower prescription drug costs, other provisions raise substantial concerns.  Among the key takeaways from the certified fiscal plan:

Clearly, the most troubling aspects of the fiscal plan’s Medicaid proposals are its proposals to potentially increase beneficiary cost-sharing and further cut benefits.  If eventually implemented, they would place many low-income beneficiaries in Puerto Rico at risk of foregoing needed services and treatments, even though their health needs are likely to be greater in the aftermath of the hurricanes.

The fiscal plan includes these damaging potential Medicaid cuts because of the federal funding shortfalls Puerto Rico will face after the temporary Medicaid funding increase expires on October 1, 2019.  That’s why Congress should consider permanent Medicaid financing changes to sustain and strengthen the Medicaid programs in Puerto Rico as well as the U.S. Virgin Islands and the other U.S. territories over the long run.  Such improvements would help ensure that Puerto Rico maintains and expands Medicaid coverage for its low-income residents, continues to improve access to and quality of care and strengthens its severely stressed and damaged health care system.  It would also make its Medicaid program far more resilient and responsive in the event of another hurricane or other natural disaster.

 

Edwin Park is a Research Professor at the Georgetown University McCourt School of Public Policy.

 @EdwinCPark

 

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