WASHINGTON - Congressman Pedro Pierluisi is urging President Obama to convene an interagency meeting to discuss resolution of a Medicaid funding problem that could hit Puerto Rico as soon as September 2017.
Pierluisi, a Democrat representing Puerto Rico, made the request in a letter sent to the president on Monday and in a speech on the House floor Wednesday that explained his concerns.
"My goal is to ensure that federal officials have advance notice of the problem, so we can begin working together now on a fair, thoughtful and bipartisan plan to address this problem before it arrives," he told House colleagues.
His letter and statement to House members come as the administration is doing whatever it can, absent a bailout or guarantees, to help the financially-distressed Puerto Rico, which has billions of dollars of junk-rated bonds outstanding.
According to Pierluisi, Puerto Rico and other territories of the U.S. are treated unfairly under Medicaid, the health care program for low-income individuals. In the 50 states and District of Columbia, Medicaid is an entitlement and there is no limit on the amount of federal funding provided as long as the state or district provides its share of matching funds.
The federal contribution, called FMAP, can range from 50% in the wealthiest states to 83% in the poorest states, he said.
In contrast, there is an annual ceiling on federal funds provided to Puerto Rico's Medicaid program. Its statutory FMAP was 50%, the same as the wealthiest states. Despite, the ceiling, the actual federal contribution was between 15% and 20%, Pierluisi said.
"In other words, Puerto Rico was annually spending upwards of $1.4 billion in territory funds to provide health care services to about 1.2 million low-income beneficiaries and receiving only $280 million from the federal government for this purpose," Pierluisi told Obama.
The American Recovery and Reinvestment Act of 2009 increased Puerto Rico's cap by 30% to about $364 million from $280 million per year, Pierluisi said. That increase lasted through the third quarter of fiscal year 2011.
The Patient Protection and Affordable Care Act, enacted in 2010, provided $7.3 billion for the five territories to share, with Puerto Rico receiving $6.3 billion of that amount. These funds can be drawn down between the fourth quarter of fiscal 2011 and the end of fiscal 2019. Also, the ACA increased Puerto Rico's FMAP to 55% from 50%. As a result, the territory now annually draws down about $1.1 billion to $1.3 billion of ACA funds instead of receiving $300 million of federal funds.
Puerto Rico only has about $3.57 billion of its $6.3 billion remaining through the end of fiscal 2019, when ACA funding expires, hence "the cliff." At this spend-down rate, it is projected the territory will deplete its pool of ACA funds in mid-2018. Recent inaction by the federal Centers for Medicare and Medicaid Services with regard to Puerto Rico's Medicare Advantage Plans could move the depletion date forward to September 2017, Pierluisi said.
"If this pool of funding is not seamlessly replenished, Puerto Rico will go back to receiving Medicaid funds [of] less than $400 million a year," Pierluisi told Obama. "I am confident that federal policymakers of both political parties understand the consequences of inaction for the U.S. citizens of Puerto Rico."
