The Puerto Rico Chamber of Commerce Health Policy Conference held on March 20th raised awareness of inequities that have led to healthcare challenges in Puerto Rico while also engaging in discussions over how to address those challenges. Suggested reforms offered by expert speakers emphasized parity in federal finding as well as actions that can be taken on the Island.
The central problem and the central solution
As a territory, Puerto Rico does not have equal footing with the states. Congress can treat territories differently from the states, and from other territories. In most cases, the opportunity to treat territories differently means treating them worse than states. That its certainly the case for federal healthcare funding.
“Every state receives open-ended Medicaid funding,” Governor Gonzalez-Colon explained. “The federal match of the FMAP is calculated by a formula and ranges from 50% to 83% based on each state per capita income. There’s no cap. There’s no cliff. States can count on its funding as long as they have eligible beneficiaries. In the case of Puerto Rico, it’s completely different. Under Section 1108G of the Social Security Act, our Medicaid funding is capped and our FMAP is fixed at 55%. That’s the law and it’s not being changed… Congress has had to step in repeatedly to temporarily increase funding, especially following the hurricane and then the COVID-19. Yet those interventions have provided limited fiscal stability. They have always come with an expiration date, and that expiration date is going to be next year. And that’s the reason we are gathering.”
Gonzalez-Colon also discussed the shortage of healthcare professionals in Puerto Rico. Since the amount of reimbursement for doctors and hospitals depends in part on the wage index — the amount of money paid to workers — the amount paid in Puerto Rico is lower than in the states. Hospitals receiving less money can’t afford to pay higher wages. Puerto Rico’s medical professionals can take a plane ride to a state and earn double their wage in the territory.
The solution to inequity in healthcare funding is to reach equality in federal funding. “So this is the ask for Congress. We request specific and reasonable numbers based on the data. First, an allotment of $4.4 billion beginning in fiscal year 2028, with annual increase of 5 percent to maintain current coverage levels and keep pace with rising health care costs and our aging population, the governor said. “Second, an FMAP established under the same formula that is applied to the states. Why the formula applying to Puerto Rico is less than the U.S. Virgin Islands? We should have the same formula. Based on Puerto Rico’s income and poverty levels, that formula will most likely yield a match of a proportionally 83 percent, the same rate currently received by other U.S. territories. We are not asking for more than the formula will produce, and we are asking for the same calculation available under that formula. These two changes will provide the structural certainty our health system needs to plan, invest, and serve our people. They are the baseline of an equal treatment.”
Gonzalez-Colon also proposed changes to Medicare and Medicaid funding. “First, reform Medicare Advantage benchmark methodology so that payment rates reflect the true cost of caring for a population. We have proposed establishing a national minimum payment at a geographic adjustment factor of .70 using the current rate that U.S. Virgin Islands uses as a baseline. Second, address the Medicare Part A inpatient prospective payments, which is this disparity that is suppressing hospital payments across Puerto Rico and the nation.”
She then announced that a Medicare Advantage increase is expected in 2027. “I need to here say something that I believe is very important. Puerto Rico’s MA payment rates will increase for the first time in 2027 at 4%, exceeding the national average increase of 2.48%. This is historic. And it happened because of our direct sustained engagement with the President Trump administration and our allies in Washington.”
Action on the Island
The changes required from Congress and the Centers for Medicare & Medicaid Services won’t be implemented just because the governor asks for them.
Governor Gonzalez-Colon went on to point out that when, as Resident Commissioner, she tried to explain the situation to Congress, she repeatedly heard that the data she presented was different from data provided by other sources. Creating a task force on healthcare will allow collection of accurate data.
“So we better get our things together, and that’s the reason we do have a task force, to literally rely on the same data so we can provide and not give any excuse to Congress or the federal administration on the numbers we’re asking,” she said. “As we don’t have members of Congress with a vote in the House or members of the Senate, we need to be together on this. And that’s the reason we are here today, that’s the reason I want to say thank you for joining us, and I hope at the end of this presentation, we can all sign an agreement to go to Congress and go to the federal administration as one voice, asking for what is needed for the Medicaid and Medicare system.”
Continuing her emphasis on unity of purpose among Puerto Rico’s advocates, the governor concluded, “Only in this way will we be able to ensure that we have, again, an adequate proportion of the federal health assignment in Puerto Rico. God bless you all, and let’s do it together.”
While Gonzalez-Colon is a statehood advocate, she did not mention the fact that, as a state, Puerto Rico would automatically have parity in all federal funding with the other states. The solutions from Puerto Rico’s Health Policy Conference focus on methods of requesting equal funding for the territory.
