Initial Medicaid Implementation: The establishment of Puerto Rico’s Medicaid program has evolved over the years. In 1968, Congress began funding a program that provided medical care to island residents with a cap in the amount of funds available. This program was called Medicaid but provided direct services rather than provided insurance coverage. Since the beginning of the program, Congress put a cap on the amount that Puerto Rico could spend in a year. In the program’s early years, it had low spending per a beneficiary. Puerto Rico’s Medicaid program as it currently is being run began in 1993. Prior to the establishment of the centralized system, the island provided health care through local and regional hospitals and clinics. Under Medicaid and CHIP law, Puerto Rico is considered a state and treated as such under the law, unless otherwise indicated. Unlike other states, Puerto Rico is allowed to use local poverty levels to determine eligibility and children and pregnant women are not subject to income-related eligibility requirements.
Key Medicaid Political Issues: Puerto Rico’s territory status has been the main political issue in Medicaid. Following the Hurricanes that hit the island in 2017, the island faced increased health care costs combined with an expiration of their Medicaid expenditures. The island allows people who meet the medically needy benefit to receive Medicaid. Those people have an income of $400 a month, plus $95 for every additional family member. The island has a relatively generous CHIP benefit, covering children up to 266% of the Puerto Rican federal poverty level. However, this eligibility level is only equal to 79% of the federal poverty level. The island has the highest level of Medicaid participation among the 50 states, DC and Puerto Rico. Approximately 40% of the population participates in Medicaid. The program doesn’t cover many of the mandatory benefits that the other states must cover. Some of the benefits not covered include nursing facility services, non-emergency transportation, and emergency medical services for non-Puerto Rican citizens. The program does provide some optional benefits including dental and prescription drugs. Unlike states, Puerto Rico is limited annually in the amount of funds that it can spend. The ceiling or cap on annual spending grows annually with the medical CPI-U. If Puerto Rico goes above the annual limit, the territory must use its own funds to pay for services. The Affordable Care Act provided Puerto Rico and the other territories with an enhanced source of federal funds. These funds were meant to be used by territories through September of 2019. However, these funds were projected to run out in 2017. Congress made additional funding available through September 2019. Unlike states, the FMAP for Puerto Rico is not based off of income and economic performance in the territory. Instead, the FMAP is set for Puerto Rico and the other US territories at 55%. If it were determined using the same formula as the one that is used for the states, Puerto Rico would have an FMAP of 83% which is the maximum allowable FMAP percentage and well above that of any other state.
Medicaid Expansion Implementation: Puerto Rico expanded Medicaid as part of the Affordable Care Act with coverage beginning January 1, 2014. The Puerto Rico Medicaid expansion extends coverage to people earning up to 133% of the Puerto Rican poverty level which is approximately equal to 40% of the federal poverty. The island did not receive the same financial incentive to expand that US states received. Instead of having 100% of the medical costs paid for by the federal government, the Puerto Rican Medicaid expansion received 93% FMAP rate. The expansion program uses the island’s Medicare managed care plans as a benchmark. Puerto Rico is the only US territory to use managed care plans in the Medicaid plan. They are paid through risk-based capitated payments.
General facts about Puerto Rico Medicaid:
Medicaid program name: Medicaid
CHIP Program name: CHIP
Medicaid Enrollment: 1.7 million (June 2015 estimate)
Total Medicaid Spending: $2.6 billion (2017 estimate)
Share of total population covered by Medicaid: 47% (2017 estimate)
Share of Children covered by Medicaid: 62% (estimate)
Expansion state: Yes
Work Requirement: No