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Gov. Vázquez to Congress: Without funding, Puerto Rico can’t run Medicaid program

By on September 17, 2019

The U.S. Capitol in Washington, D.C. (File)

Requests allocation so efforts ‘to retain health professionals and provide…treatment will not be lost’

SAN JUAN — In an urgent letter to the leaders of the U.S. Congress, Puerto Rico Gov. Wanda Vázquez warned that were the federal Medicaid allocation granted in the Bipartisan Budget Act of 2018 not extended, a scenario could ensue in which the island’s government won’t be able to operate its healthcare network.

In her letter, dated Sept. 14, to Senate Majority Leader Mitch McConnell, House Speaker Nancy Pelosi, Senate Minority Leader Charles “Chuck” Schumer and House Minority Leader Kevin McCarthy, the governor is asking that Congress includes in their next continuing resolution a short-term extension of Medicaid funding while a longer-term option is presented.  

“The combination of insufficient federal allotment at a low matching rate means that Puerto Rico will have an uncharacteristically high burn rate for state generated funding,” Vázquez wrote, adding that despite attempts “in the budget to prepare for this event, it is possible that the Puerto Rico Treasury will not have sufficient state funds to cover program costs. Thus, it is crucial Puerto Rico secures additional funding, in addition to the higher matching rate.”

The Bipartisan Budget Act of 2018 approved $4.8 billion for Medicaid, which is managed locally through the Vital program. This allocation essentially took the Federal Assistance Percentage (FMAP), used to set the Medicaid matching fund rate, to 100 percent, eliminating the financial burden on the local government for the Vital program. But when the funds expire, the FMAP rate will revert to 55 percent. 

Vázquez argued that reverting to a 55 percent FMAP “means that Puerto Rico must once again contribute to a vastly disproportionate share of its own funds for its Medicaid program when compared to any other State.”

The governor’s argument is based on the difference in which the funding rate is set. For states, FMAP is calculated using per capita income but for territories it is capped at 55 percent. If the same formula as the states were applied in Puerto Rico, the rate would surpass 80 percent.  

Vazquéz’s effort comes in addition to those by Resident Commissioner Jenniffer González to include Puerto Rico in a continuing resolution scheduled for passage in Congress by Oct. 1 to fund the federal government. However, in an interview with Radio Isla’s Milly Méndez, González said “it is an uphill [effort] but, regardless, we are pushing that [measure] for Puerto Rico,” adding that “continuing resolutions generally only contemplate government operational costs.”

Among the reasons she gave for needing the extension, Vázquez said the budget cuts by the island’s Financial Oversight and Management Board were going to have a $222 million impact for fiscal year 2020. Also, because reimbursement increases for providers are going to be approved, the issue of a shortage of healthcare providers could worsen. 

Vázquez further said that a lack of funding could jeopardize the inclusion of HIV and Hepatitis-C medication, as well as the implementation of “transparency, reporting and oversight measures.”

Looming fiscal cliffs are becoming a recurring issue for the island’s public healthcare program. In 2017, the then-new administration of former Gov. Ricardo Rosselló had to ask Congress for additional funds because the Medicaid block grant was running out two years ahead of schedule. 

Congress granted a portion of what Resident Commissioner González requested, avoiding the cliff temporarily. A year later, warning of the possible need to cut back on coverage resumed but the Hurricane María recovery package approved in the Bipartisan Budget Act of 2018 injected the funding for the Vital program.

About half of Puerto Rico’s population depends upon the public health system for medical care.

See Gov. Vázquez’s letter to Congress here.