U.S. Treasury Tells Hatch to Address PR’s Health Care Shortfall
SAN JUAN—The U.S. Treasury Department told Sen. Orrin Hatch, who is head of the Task Force on Economic Growth created by Promesa, that Congress must urgently address Puerto Rico’s funding shortfall in its health care system and obtain the earned income tax credit for its citizens.
The information is contained in a letter Treasury sent to Hatch July 29, a few days after he was appointed chairman of the task force in charge of examining federal legislation that impedes Puerto Rico’s economic growth.
The letter came after Hatch, who is also chairman of the U.S. Senate Finance Committee, asked the Securities and Exchange Commission (SEC) last month to investigate the Treasury’s possible involvement in creditor negotiations over the restructuring of Puerto Rico debt.
Hatch also asked the SEC to probe the information shared between some investors, Puerto Rico and U.S. government officials about the island’s fiscal state, contending that some investors may have gotten information that was not given to all of the bondholders. He also requested that the agency look into any potential illegal activity by brokers, advisers or underwriters.
Treasury submitted a chronology of actions the agency has carried out to help Puerto Rico get out of its economic decline amid a crippling $69-billion debt.
“As a narrow part of our work, Puerto Rico agreed to share with Treasury certain non-public information about certain aspects of its financial condition, subject to important limitations on its dissemination. This is a typical arrangement, and it helped us better understand Puerto Rico’s financial condition,” Treasury officials said.
The letter also contains suggestions to Hatch on how it can help Puerto Rico in the short term with its economic problems. As chairman of the task force, Hatch has until Sept.15 to provide recommendations on things Congress can do immediately to address Puerto Rico’s crisis.
Specifically, the letter notes that the Medicaid programs in Puerto Rico and the other U.S. territories are fundamentally different from the Medicaid program in the states. For instance, Medicaid funding in the territories is capped, beneficiaries are offered fewer benefits, and the federal government contributes less on a per-capita basis than it does to the rest of the nation. Puerto Rico provides health insurance coverage to more than 1.5 million Medicaid beneficiaries, representing nearly half of Puerto Rico’s total population.
“When one-time additional funds provided by the Affordable Care Act are exhausted in Puerto Rico, as early as June 2017, up to 900,000 Americans living in Puerto Rico could lose their healthcare coverage. To avoid this calamity, Congress still needs to reform Puerto Rico’s Medicaid program to raise the standard of care and prevent Medicaid’s unstable financing from exacerbating Puerto Rico’s fiscal crisis,” the letter states.
Apart from fixing Puerto Rico’s inadequate healthcare treatment, the letter says Congress must also enact bipartisan tools for stimulating economic growth and rewarding work.
“A large body of economic research, including Treasury’s own analysis, has found that the Earned Income Tax Credit is one of the strongest, most powerful policy tools to meet those objectives. We look forward to working with Congress on these important issues,” the letter goes on.
The task force was created as part of Promesa, the Puerto Rico Oversight Management & Economic Stability Act, which creates a fiscal control board to manage the island’s economic affairs and provides a mechanism to facilitate voluntary restructurings.