BY MICHAEL J. MELENDEZ AND DR. JAIME TORRES, OPINION CONTRIBUTORS 9/11/19 02:00 PM EDT
THE VIEWS EXPRESSED BY CONTRIBUTORS ARE THEIR OWN AND NOT THE VIEW OF THE HILL
Congress reconvenes this week and will tackle many issues that are crucial for our country. Among them is the imminent man-made crisis facing Puerto Rico and other U.S. territories when funding from the 2018 Bipartisan Budget Act and the Affordable Care Act runs out at the end of September and December 2019.
For Puerto Rico, this means that starting Oct. 1, 2019, the beginning of FY 2020, the island would only receive an estimated $366.7 million in federal Medicaid matching dollars to cover its Medicaid beneficiaries. To be clear, 1.6 million people in Puerto Rico are reliant upon Medicaid - that is nearly half the entire population of the island. Such a drastic cut in funding would not adequately support the needs of beneficiaries and could worsen health outcomes for the island’s people.
For years, Puerto Rico’s second-class status as a territory of the United States has exacerbated the island’s humanitarian crisis. Because of antiquated policies, such as those on Puerto Rico’s federal funding support for Medicaid, residents’ health care has been gravely limited, which has perpetuated serious, systematic problems.
In recent weeks, we’ve seen the people of Puerto Rico fighting back against the problems plaguing their island. The news stories coming from the island have been surprising yet thrilling. More than half a million people took to the streets demanding an end to government corruption and influence-peddling that culminated in the resignation of the governor. This was democracy in action; nothing short of accountability and transparency from their government would be accepted.
Now is the right time for Congress to address the inherent inequality of Medicaid funding for Puerto Rico and all U.S. territories. Arbitrary and unfair regulatory hurdles set up decades ago by Congress have perpetuated a lack of accountability and transparency and must be changed to meet the needs of the people today.
Critical for advancing this goal, the “Community Health Investment, Modernization, and Excellence Act” (H.R. 2328) includes the Territories Health Care Improvement Act, which would make substantive changes to how Medicaid is administered in territories like Puerto Rico. If approved by Congress, H.R. 2328 could go on to provide $12 billion to secure the Medicaid program on the island for four more years.
The people of Puerto Rico have clearly demonstrated their appetite for transparency and accountability, and the mandatory safeguards written into the law ensure that federal funding would always be used to benefit patients.
H.R. 2328’s robust monitoring mechanism for strict oversight of federal Medicaid funds includes much-needed provisions that would better ensure federal funding dollars for Medicaid are used properly. To start, H.R. 2328 would authorize the Department of Health & Human Services’ Office of Inspector General to perform audits of all federal Medicaid funding on an annual basis, including work plans to monitor and/or investigate contracting practices related to the Puerto Rico Medicaid program. The Centers for Medicaid & Medicare Services would oversee all contracts awarded utilizing Medicaid funding. Puerto Rico itself would establish a system for tracking amounts paid by the federal government, as well as local matching of Medicaid funds, and would have information available with respect to each quarter. Furthermore, the Government Accountability Office would issue a report on contracting oversight and approval for the Puerto Rico Medicaid program no later than two years after the date of enactment.
As is clear after weeks of protests and years of unrest, Puerto Rico can no longer afford to operate under the status quo. Such oversight measures proposed by H.R. 2328 are badly needed to help set the island’s Medicaid program up for success and better serve the millions of residents reliant upon health care. But all of this won’t happen if Congress doesn’t act now.
Puerto Ricans are citizens of this country, and they cannot be held accountable for the egregious actions of elected officials and the contractors working on their behalf. Those actions should be condemned, and the right people prosecuted. But absent any congressional action, it may be the population that is dependent on Medicaid for health care that pays the ultimate price for the wrongdoings of their leaders. If Congress does not pass H.R. 2328, millions of people could become uninsured and sick, further sinking the island into a humanitarian crisis.
Michael J. Melendez, LMSW is Principal of MJM CONTIGO, LLC. and was the former the Associate Regional Administrator of the Center for Medicare & Medicaid Services (CMS) Division of Medicaid and Children’s Health Operations for the New York Regional Office. Dr. Jaime R. Torres was the former regional director of the US Department of Health & Human Services, Region II—serving New York, New Jersey, Puerto Rico and the US Virgin Islands. They are board members Latinos for Healthcare Equity.
Orlando Sentinel
Medicaid Cliff is newest crisis in Puerto Rico |
Commentary
By Michael J. Melendez
Guest Columnist
APRIL 11, 2019, 5:10 PM
T his past week, billions of dollars in disaster relief funds for U.S. states and territories were held up by
the Senate because of a political fight over Puerto Rico. Historically, Puerto Rico’s problems have been cast aside by U.S. federal lawmakers with far more political grandstanding happening than actual policymaking and problem-solving.
The federal government can no longer afford to turn its back on the American citizens of Puerto Rico. Federal funding for Medicaid expires at the end of the year resulting in the “Medicaid cliff,” potentially causing nearly one million U.S. citizens to lose their health care coverage. This potential lack in coverage exacerbates residents’ health problems and further financially drains the system. It could also force residents to seek care elsewhere, potentially on the mainland.
El Morro is a fort in Old San Juan, Puerto Rico. (Sun Sentinel)
While federal health care reform, as part of the ACA, has been a success in Puerto Rico and the U.S. territories, that success is now in jeopardy as the looming Medicaid cliff approaches. This is further intensified by Puerto Rico’s continuing economic status which represents a fiscal crisis and more importantly a human crisis.
In order to avoid the Medicaid cliff and a potential health care crisis, federal leaders must soon adopt resolute policy solutions. Congress can adopt legislative fixes that would create parity in Medicaid funding in the U.S. territories,.
Currently, the Federal Medical Assistance Percentage (FMAP) — used to determine the funding allocated to some medical and social-service programs — in the U.S. territories is capped at 55 percent, the statutory minimum, compared to up to 83 percent for some of the poorest states. The Social Security Act also limits the total amount of federal spending in the territories with a Medicaid cap, allowing the federal government to match every Medicaid dollar spent by the territories until that limit and forcing the territories to financially cover the rest. Puerto Rico is challenged to find the money to cover its essential services for the
43.5 percent of its U.S. citizens living below the federal poverty line.
To improve Puerto Rico’s Medicaid funding situation, Congress should change the status quo and adopt applying the same formula used to calculate the FMAP for Puerto Rico as the states, while also removing the annual Medicaid cap limit on total federal spending currently in place. Medicaid eligibility levels in the territories could be expanded to include all residents with incomes up to and including 100% of the federal poverty level, a construct which is already in place for the 48 contiguous states and District of Columbia.
These changes would calculate a new level of federal funding for Medicaid, a number that would give more financial support and be far fairer to Puerto Rico’s 1.3 million U.S. citizens currently reliant upon Medicaid.
These changes would not come for free; in fact, in order for these changes to occur, the island would need to meet the minimum federal requirements for eligibility, coverage, and administration. Puerto Rico must consistently show a proven track record of providing Medicaid’s many benefits and establishing accountability and oversight of the program’s implementation.
The idea to fix Medicaid for Puerto Rico is not new. In fact, the Obama Administration proposed removing the cap on funding for U.S. territories and expanding Medicaid eligibility to 100 percent of the federal poverty level in 2017. As considered then and now, these changes would allow more U.S. citizens to have access to health insurance and further lower the number of uninsured residents.
While not an immediate fix for all of the island’s financial troubles, these solutions would gradually help the island cover Medicaid costs, revitalizing the system’s programs to better serve its U.S. citizens.
Recently, calls for Puerto Rico’s statehood from U.S. Rep. Darren Soto and Puerto Rico Resident
Commissioner Jenniffer González were made in an effort to address the inequity the island’s residents face in comparison to the other states. Support for this has been split, with some arguing in favor of it and others pointing out that statehood could subjugate Puerto Rico’s independence and authority over its own matters.
While leaders continue to debate the merits of formalizing Puerto Rico’s status, fixing Medicaid funding for the island and other U.S. territories this year would be a near-term policy solution that would save U.S. citizens’ health coverage, increase federal funding support, and stave off a humanitarian crisis.
Michael J. Melendez is Principal of MJM Contigo, a consulting firm that specializes in government health insurance programs.
Temporary Medicaid funds for U.S. territories scheduled to run out soon
Democrats aim to address problem before hundreds of thousands lose coverageBy Sam McQuillan | June 18, 2019 05:41AM ET | Bloomberg Law
More than 900,000 Puerto Ricans will lose their Medicaid coverage in September unless Congress acts, and now Democrats are rolling out plans to aid U.S. territories.
Supplemental federal funds of some $11 billion for Puerto Rico will expire at the end of the fiscal year. Once that happens, the commonwealth, which currently has over $70 billion in debt, will have no choice but to rely on a federal matching system for U.S. territories that ignores its massive levels of poverty.
The House Committee on Energy and Commerce’s health subcommittee will hold a hearing June 20 to address the looming situation in Puerto Rico. It will consider restructuring federal assistance programs in the territories to mirror state programs, which take poverty levels into account.
“The ideal is to treat the U.S. citizens in those territories as U.S. citizens,” Michael Melendez, a retired Medicaid administrator for the Center for Medicare & Medicaid Services, said. “If everybody has to stop at the red light, then everybody has to stop at the red light, not just people that live in the mainland. If they’re going to be held to certain requirements, let them meet those requirements, but fund the program at the same level that states get the funding.”
Democrats Weigh Bills
The hearing comes just a week after Sen. Bernie Sanders (I-Vt.) introduced S. 1773, which seeks state-level Medicaid funding for Puerto Rico and the other U.S. territories. The bill is cosponsored by seven Democrats, including fellow 2020 hopefuls Sen. Elizabeth Warren (D-Mass.), Kirsten Gillibrand (D-N.Y.), Cory Booker (D-N.J.), and Kamala Harris (D-Calif.). The Senate referred the bill to the Finance Committee June 11, but it’s unlikely to move in a Republican-controlled Senate.
Rep. Stacey Plaskett (D-V.I.) introduced a similar bill in the House, H.R. 1354, in February. It awaits action in the Energy and Commerce and Ways and Means committees.
Congress has been willing to help Puerto Rico before. In 2016 it passed the Puerto Rico Oversight, Management, and Economic Stability Act, a bipartisan effort to address Puerto Rico’s massive debt.
An adviser from a Puerto Rican activist group said a bill in the works between Reps. Frank Pallone Jr. (D-N.J.) and Darren Soto (D-Fla.) could be a long-term fix to the problem instead of another extension of interim funds. Neither representative’s office responded to requests for comment.
“What I’m hearing is that they want a multi-year fix that increases funding, eventually creating state-like treatment for Puerto Rico so they don’t have to keep dealing with this,” the advocate said.
Puerto Rico Governor Ricardo Rossello previously sent letters to Congress requesting $15.1 billion over the next five years and a new funding system for territories.
Funding Disparities
All states receive federal reimbursement for every dollar they spend on Medicaid, called a Federal Matching Assistance Percentage.
American Samoa, Guam, the Northern Mariana Islands, Puerto Rico and the U.S. Virgin Islands receive their federal money at a set matching rate of 55%, while states have their rates set based off of average income. For instance Mississippi, one of the nation’s poorest states, receives the highest federal matching assistance at 76.98%.
According to Census data, Puerto Rico’s median household income was $19,775 in 2018. If federal matching rates functioned for territories like they do for states, Puerto Rico would receive a matching rate of around 83%.
States also receive open-ended funding. The federal government will keep matching them at their percentage rates as long as the states are willing to pay their end. Conversely, funding for territories is restricted by a federal spending cap, so there’s a limit of how much aid will be federally matched.
When the Money Runs Out
When $4.8 billion hurricane relief aid from the Bipartisan Budget Act of 2018 expires in September, Puerto Rico’s Medicaid will rely on what remains of the $6.3 billion provided by the Affordable Care Act. But that money is also set to expire in September.
The Medicaid commission released a report in October highlighting the uncertainty around safety-net services existing to aid estimated 900,000 potential uninsured. It found that money from the ACA was already “nearly depleted” as of February 2018.
To address this fiscal cliff, the Democratic legislation proposes eliminating the spending cap placed on territory funding and replacing the set fixed 55% federal matching rate with one that adjusts based off income.
To contact the reporter on this story: Sam McQuillan in Washington at smcquillan@bloomberglaw.com
To contact the editors responsible for this story: Fawn Johnson at fjohnson@bloomberglaw.com; Andrew Childers at achilders@bloomberglaw.com
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