Puerto Rico Braces for Health Care Crisis

Puerto Rico is beginning to face another budget cut to a highly-used Medicare program as well as an alarming shortage of Medicaid funds. The health care system is moving towards a crisis which could further undermine the island's gutted economy. The first sign of this crisis regarding the health care system was seriously in trouble when a large amount of doctors, a total of 3,000 in 5 years, began to leave the island for better positions, more money and less stress in the United States. 


On an island where more than 60 percent of residents receive Medicare or Medicaid — an indicator of Puerto Rico’s poverty and rapidly aging population — the dwindling funds have set off outpourings of concern among patients and doctors, protest rallies and intense lobbying in Washington.

Issues relating to the healthcare crisis dates back decades and stems, in large part, from a vast disparity in federal funding for health care on the island compared with the 50 states.

This disparity is partly responsible for $25 billion of Puerto Rico’s $73 billion debt, as its government was forced to borrow over time to keep the Medicaid program afloat, according to economists.

Dr. Johnny Rullán, right, a former secretary of the island’s Health Department, is lobbying for equal funding.

“These are a cascade of cuts that will have disastrous, gigantic implications,” said Dennis Rivera, the chairman of the Puerto Rico Healthcare Crisis Coalition, a group of doctors, hospitals, health care advocates, unions and insurance companies lobbying the Obama administration and Congress. “Health care in Puerto Rico is headed for a collapse.”

In January, the federal government is supposed to cut payments to Medicare Advantage plans in Puerto Rico by 11 percent. The plans, offered by private companies, are a popular alternative to Medicare, often providing extra benefits and accessibility.

Three-quarters of the Medicare population on the island is enrolled in Advantage, and patients, many of them poor and chronically ill, worry about the impact of the cuts on costs and benefits.

The cuts are expected to lead to higher co-pays for medication and hospitalization. Several hundred doctors are already losing their contracts with major managed care companies. InnovaCare has terminated 200 contracts, Dr. Shinto said.

This is in part because of how doctors practice here; they tend to be in solo practices, making it difficult to meet all requirements. Lower funding levels also complicated efforts to meet standards. The island’s Medicaid program — called Mi Salud, or My Health — serves nearly 1.6 million people, or 45 percent of the island’s population, the largest share in the United States.

Health care makes up 20 percent of the Puerto Rican economy, which has been in a slow decline as manufacturing jobs have disappeared and the government has borrowed more than it could pay back.The Medicaid program, which relies on both federal and commonwealth funds, could run out of the grant money as early as the end of 2016, three years earlier than anticipated


This could mean that 900,000 people will have to be dropped from the program.

Puerto Rico cannot use the federal health insurance exchange under the Affordable Care Act, and it chose not to create its own exchange because its citizens do not pay federal income taxes and thus are not eligible for the subsidies that make exchange plans more affordable.

The reduction in Medicare Advantage funding is meant to bring federal payments for that program more in line with traditional Medicare fee-for-service rates in Puerto Rico.

Puerto Rico’s health care woes began in 1968, when Congress placed a cap on Medicaid in the United States territories that sharply limited the federal government’s contribution. For Medicaid, this means that Puerto Rico typically gets $373 million a year from the federal government and has to pick up the rest of the $2.5 billion tab, Mr. Rivera of the Puerto Rico Health Care Coalition said.