Puerto Rico's dwindling Medicaid coffers may get two years of full funding in the Senate's disaster aid package after negotiations for the same broke down in the House.
If Congress lifts the caps on the territory's Medicaid funding, Puerto Rico wouldn't have to cough up its usual share of Medicaid costs, which even before Hurricane Maria it couldn't afford.
According to senior GOP aides and Congressional Hispanic Caucus aides close to discussions, the Senate is likely to land on this two-year Medicaid funding deal as the territory runs up against yet another Medicaid funding cliff.
This, Puerto Rico hospital officials say, could be a critical boon for the island, where at least two-thirds of the inhabitants depend on U.S. government funding for health coverage.
The current state of Medicaid affairs, says Ashford Presbyterian Hospital CEO Pedro González of the upcoming cliff, "is the worst crisis we may have in our health system."
Puerto Rico's Medicaid runs up against fiscal and funding cliffs regularly, relieved by last-minute congressional appropriations.
The cost of the funding is roughly $4.6 billion to $6 billion over two years. Last year's fix of $295.9 million is estimated to run out in March at the latest, although one representative of the Puerto Rican government said that's only if the government manages to use "extraordinary measures" to stretch the money. It's likelier to run out in February, he said.
The Puerto Rico Medicaid question roiled House lawmakers before they passed the $81 billion disaster aid package before Christmas.
House Republicans offered the two years of unrestricted funding, a senior GOP aide said, but Democratic leaders held out for tax provisions for the territory as well.
Ultimately, the $81 billion in aid funding for all disaster-hit states and territories passed the House just before recess without any mention of Puerto Rico Medicaid, and U.S. Rep. Nydia M. Velázquez (D-N.Y.) ripped the final bill as "insufficient to address the ongoing humanitarian crisis in Puerto Rico."
"The bill does not include cost-sharing for recovery efforts in Puerto Rico," Velázquez said. "It provides nothing to address Puerto Rico's Medicaid crisis."
The Senate voted down the measure and is now at work on its own version. Again, the GOP aide said, the two years of 100% funding are in play.
Why is Medicaid once again in the spotlight? According to González, Medicaid is only one of the health programs that operates in a significantly different way in Puerto Rico than in other states and territories. Therefore, he says, the ongoing Medicaid crisis can't be viewed in a silo, and this is one of the reasons it continues to be a crisis.
"It's a snowball effect, a whole host of situations that all converge on impacting the financial situations in the health services," says Margo Silva, a spokesperson for Ashford Presbyterian.
For starters, Puerto Rico receives a limited amount of Medicaid money through a block grant. The Affordable Care Act brought Puerto Rico significant new funding, but still the territory found itself up against a funding cliff within a few years. Because the island's government pays 55 cents for each dollar it gets in federal Medicaid money, Puerto Rico couldn't afford to draw down all the monies it was entitled to.
The makeup of the island's health system is also different, an odd melding of private and public.
Nearly half of the roughly 3.6 million Puerto Ricans qualify for Medicaid, according to the latest analysis from the Kaiser Family Foundation. Private insurers run Medicaid through a capitated managed-care system.
Then there's Medicare or, rather, Medicare Advantage. MA has roughly 80% of Medicare's market in capitated managed-care plans, González says, even though the reimbursement rates are lower in Puerto Rico than the Virgin Islands and certainly in the states. In contrast, only about 31% of Medicare beneficiaries nationwide enroll in MA capitated plans.
More than 40% of Puerto Ricans who qualify for Medicare are also eligible for Medicaid. Only about 8% of the population is uninsured.
In the early 1990s, the government also sold off nearly all its health facilities, transforming a public health system into a private one operated by a mix of not-for-profit and for-profit hospitals.
The mostly privatized system now employs vast numbers of people on the island; in fact it's a crucial employer. Yet most of the funding for this privatized system funnels from the U.S. government, with a huge swath of the island's economy tied up with managed-care insurers, who underwrite Puerto Rico's Medicaid and MA plans, and hospitals.
This means the Medicaid funding crisis isn't just for patients: the ongoing uncertainty threatens the entire system and a major sector of the economy.
Will two years of 100% Medicaid funding help?
González says yes, although he also wants the federal-territory relationship overhauled so providers and insurers can plan better.
The two-year funding is, of course, tied to aid for the relief of Hurricane Maria's devastation. The storm left the health system with expensive damage, González said. Days without power meant they had to ramp back care for patients, although he said he doesn't yet know the full cost to his own hospital. Insurers and claims adjusters continue to assess the losses from ruined surgical equipment and structures.
The hurricane also brought uncompensated-care costs. From September on, the hospitals saw lower payments from patients. And, as providers had to cut back on non-urgent services temporarily, people needing basic treatment sought care in emergency departments.