It seems as though New York Governor Andrew Cuomo is doing more for Puerto Rico than merely lobbying Congress to expand Chapter 9 bankruptcy protection to the territory’s municipalities and utilities. The local Medicaid director is in the islands helping to craft an application for a waiver that would provide a quick cash infusion, one that is not subject to Congressional approval.
Currently, the island receives about 55 percent reimbursement for its approximately $2.8 billion Medicaid program. But those federal dollars come from a $6.4 billion pot that was set aside as part of the Affordable Care Act.
That pot of money was supposed to last Puerto Rico through 2019, but cost overruns mean it will likely run out within the next 18 months. When it does, the federal contribution toward Puerto Rico’s Medicaid program is capped at $400 million. Given the size of the program, that’s an effective rate of 14 percent. (New York, a far wealthier state, receives a 50 percent match from the federal government.)
The looming crisis has forced doctors to flee the island in search of better rates and patients to flee in search of better care, only exacerbating Puerto Rico’s problems.
Whether the application is accepted is yet to be seen, but at this point, given the slow response from Congress, it might be one of the few lifelines left to the administration of the burdened territory.