Puerto Rico Blues
Puerto Rico’s Health Care Woes

Catastrophe upon catastrophe: Puerto Rico is already struggling with unfunded pension obligations and a junk credit rating, but the next domino to fall in the island’s fiscal crisis might be health care. Because of the way Medicaid and Medicare reimbursements are structured, Puerto Rican doctors receive lower rates than those elsewhere in America, leading doctors to pack up and leave (some say almost 400 leave every year, out of a total of 11,000 providers in the territory). Now the island might see another 11 percent rate cut to Medicare Advantage repayments, while rates go up three percent elsewhere. And that’s not all, via WaPo:

The reductions will cost the island’s health-care system an estimated $500 million. Meanwhile, the island’s Medicaid program is propped up for now by a federal grant that is set to expire in the next two years. If that grant is not renewed, cash-strapped Puerto Rico will have to come up with $1.8 billion by 2018, or drastically reduce Medicaid services. At the same time, the island’s cash crunch has left it short on the money it needs to pay for its share of Medicare and Medicaid.

“This is a whopper of a problem,” said Dennis Rivera, chairman of the newly constituted Puerto Rico Healthcare Crisis Coalition. “We are facing a catastrophic health-care situation.”

Unless this crisis is addressed—and to-date the only idea on offer is raising the reimbursement rates, which the feds so far appear unwilling to do—it will compound the fiscal crisis the island is facing. Since no good model exists for the default of a U.S. territory (it can’t, for example, declare bankruptcy), nobody quite knows what happens then. But it won’t be pretty.

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