Puerto Rico’s Health Care System: Diminishing Benefits, Quality of Care, and Longevity


Sixty percent of residents in Puerto Rico have either Medicare or Medicaid. The population on the island is quickly growing older while less than half of the population contributes to the labor force. Pharmaceutical companies and other businesses were lured to the U.S. territory by tax exemptions until Congress ended corporate tax breaks in 2006. This created an exodus of big businesses and catalyzed the decline of an already unstable economy; emigration of workforce, default on bonds, and decreased quality of care to American citizens under the Medicare and Medicaid programs ensued. With twenty percent of Puerto Rico’s GDP tied up in the healthcare industry, longevity of the healthcare system is uncertain.

Puerto Rican residents pay the same social security and Medicare taxes, but surprisingly receive lower Medicaid, Medicare Advantage, and Medicare funding than any state. The Medicaid system, Mi Salud, receives less federal funding and, unlike any other mainland state, is capped at a much lower rate than any state. The Medicare and Medicare Advantage programs are reimbursed thirty percent lower than the lowest funded state of the union. Cuts in these programs have jeopardized work stability for doctors. Managed care companies are ending their agreements with doctors and solo practitioners have an extremely difficult time meeting federal standards while being paid at such low reimbursement rates. What makes things worse is that Congress is not constructively appropriating funds in order to ameliorate the current economic crisis.

The Center for Medicaid and Medicare Services (“CMS”) cut funding to Medicare Advantage plans in Puerto Rico by eleven percent, effective January 2016. The consequences of such a budget cut include decreased patient-assistance benefits and higher medication and hospitalization co-pays. Medicaid and Medicare patients with chronic and terminal illnesses will be forced to pay gross amounts of money for medication and face the real alternative of not being able to afford treatment. While Puerto Ricans are suffering from diminished access to quality care, the CMS increased funding to every other state by three percent. The only impediment to this disastrous eventuality is a federal grant supplementing Mi Salud, which is quickly running out.

The federal government granted Puerto Rico a one-time grant of $6.4 billion. According to Dennis Rivera, the chairman of the Puerto Rico Healthcare Crisis Coalition, this money is quickly running out. When this money runs out, expected sometime between 2016 and 2019, Medicaid and Medicare services will suffer dramatic changes in both eligibility and services provided. The only feasible alternative is a fee-for-service system due to the reduction in federal funding.

Puerto Rico can neither use the federal health insurance exchange nor use the state exchange system under the Affordable Care Act. Because Puerto Ricans do not pay federal income tax, they are not eligible for subsidies that make these plans more affordable. This makes services more expensive, and subsequently less available to the population that needs them. Therefore, as U.S. citizens, the federal government should put forth great effort to ensure that Puerto Ricans are receiving the same quality care under Medicaid and Medicare as other citizens do. Once the CMS budget cut is in place, and the $6.4 billion grant runs out, there will be a dire need for intervention. Whether or not the federal government will wait until Puerto Rico hits rock bottom is another question entirely.

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