Puerto Rico government plans to cut Medicaid to help balance budget

by | Sep 6, 2018 | Puerto Rico | Comments

Puerto Rico is being forced to cut $840 million from its Medicaid budget as part of its agreement with the Financial Oversight and Management Board to reduce its debt. While the islands’ Medicaid expenditures do constitute a large portion of the $70 billion debt the islands are desperately trying to crawl out of, the cuts are still controversial.

It is no secret that many Puerto Ricans are poor, with the US Census Bureau stating that 43.5% of the population lived below the poverty line as of July 1, 2017. This means that nearly half of the population was able to qualify for Medicaid before Hurricane Maria and Irma wreaked havoc. This number has likely grown in their aftermath. The burdens of a poverty-stricken and rapidly aging population helped dig Puerto Rico into a Medicaid-debt-hole in the first place, but the federal government also culpable.

The federal government pays only 19% of Puerto Rico’s Medicaid costs as opposed to 70% or more of those generated by states. The pitiful contribution is comparable to using a single sandbag to dam an overflowing river. While Congress granted an extra $4.8 billion for Medicaid expenses in February, the funds are slated to run out next year. Islanders are also facing a bevy of chronic diseases, like diabetes and hypertension, at higher rates than on the mainland. They are also experiencing health disorders caused by the hurricane and need extra mental health counseling following the trauma of the storms.

The administration of Governor Ricardo Rosselló (NPP, D) has developed a plan to generate health care savings by ending monopolies in the local health insurance market and introducing more competitive plans. If this succeeds they may be able to avoid making these drastic cuts, however, should this fail to generate enough savings roughly 69% of islanders receiving Medicaid will lose their coverage.