More trouble ahead: Puerto Rico's impending Medicaid crisis

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Oct 10 2017
Lara Merling and Jake Johnston
Center for Political and Economic Research
http://cepr.net/publications/reports/more-trouble-ahead-puerto-rico-s-impending-medicaid-crisis

Already in the midst of a fiscal crisis, Puerto Rico faces a long road to recovery from Hurricane Maria, a devastating storm it was ill-equipped to handle. The urgent efforts to address both the humanitarian needs and damage caused by the storm must also extend to solving the island’s imminent Medicaid crisis, a preexisting condition that plagued Puerto Rico before the hurricane and that has been exacerbated by it.

This paper examines the inadequate federal support received by Puerto Rico for its Medicaid program, and shows that ― barring immediate action from the US Congress ― the territory will not have sufficient funds to continue operating in 2018. While the cost of living is higher in Puerto Rico than the US average, health care services are the only item that is significantly less costly on the island.  

Using 2016 Medicaid costs and looking at known migration patterns, we calculate what the federal government and states are likely to pay for providing Medicaid for Puerto Ricans moving to US states from 2018 to 2027 using two different migration scenarios. Under the more pessimistic scenario - a higher out-migration rate - more likely in the wake of Hurricane Maria, the cost for providing Medicaid to new Puerto Rican migrants stateside is $19.4 billion for the federal government and $12.3 billion among states, as compared to a total of $7.8 billion in Puerto Rico.

PDF of study report here

Excerpt:

This paper examines the inadequate federal support received by Puerto Rico for its Medicaid program, and shows that ― barring immediate action from the US Congress ― the territory will not have sufficient funds to continue operating in 2018. While the cost of living is higher in Puerto Rico than the US average, health care services are the only item that is significantly less costly on the island. We show that the federal government and various states incur much higher costs to provide Medicaid for Puerto Ricans pushed to move to states. Rather than receiving federal reimbursement as a percentage of what it actually spends on Medicaid, Puerto Rico is subject to a hard cap ― first set by the US Congress in 1968 ― that is currently at about $300 million per year. The insufficient funding has forced the Puerto Rican government to cover a large portion of the costs from its own budget, contributing to the island’s ongoing debt crisis.

Comments

One nation, one health plan! No Medicaid, rather, national improved Medicare for all.

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