The devastating impact of Hurricane Maria is bringing Puerto Rico’s Medicaid funding crisis to a head. Over 40 percent of Puerto Ricans are covered by Medicaid. For years, the program has been severely underfunded due to a hard cap on Puerto Rico’s federal Medicaid funding. Enormous costs have subsequently shifted to the Puerto Rican government, contributing to its deepening fiscal crisis.
A new report from the Center for Economic and Policy Research concludes that unless Congress acts quickly to change Puerto Rico’s Medicaid funding model, both federal and state Medicaid budgets will incur billions more in costs. Thousands of Puerto Ricans will be forced to relocate stateside to get the health care they need, and this health care is significantly more expensive. Since Florida is the most popular destination for Puerto Rican relocation, the state will bear a disproportionate amount of these costs.
Medicaid costs would be substantially less for both the federal and state government if Congress would fund Puerto Rico’s Medicaid program the same way it funds the states– through open-ended federal funding, which increases in times of disasters and higher needs.
Puerto Rico’s Medicaid program is the poster child for the pitfalls of capped federal Medicaid funding. It’s a cautionary tale that cannot be ignored as troubling national proposals for capped Medicaid funding continue to circulate.