Puerto Rico’s Health-Care Crisis Threatens the Mainland

Puerto Rican immigrants -- many of them sick and in need of care -- are flocking to the states in unprecedented numbers. New York has volunteered to help the island, but it may not be able to.
by | March 2016
(AP)

Just a few years ago, New York had a health-care crisis on its hands. The state was spending $50 billion a year on Medicaid in 2011 -- more than any other state in the country. Health-care officials in New York worked together to bring down spending, and last year the state introduced an $8 billion plan to repurpose its whole program, with a focus on outpatient care and community health.

But now the state is facing another threat to its health-care system: Puerto Rico. America’s biggest territory continues to find itself in serious financial trouble, with a current debt of $72 billion, which the territory’s governor has declared “not payable.” Health-care spending is partly to blame: More than 60 percent of the population is dependent on Medicaid or Medicare, but the federal government only covers 15 percent of those expenses. To put that in perspective, Mississippi -- the state that most closely resembles Puerto Rico in terms of poverty -- usually has around 75 percent of its Medicaid expenses reimbursed by Washington. To make matters worse, this year Puerto Rico is set for an 11 percent cut to its Medicaid Advantage system, thanks to the Affordable Care Act (unless Congress steps in to postpone or cancel the cuts).

Why does that matter to New York? Because there are already more than a million Puerto Rican immigrants living in the state, more than anywhere else on the mainland. More people leaving the island likely means more people moving to New York. If the Medicaid Advantage cut does happen, health-care experts say more than a million new immigrants could be coming to the mainland in the next year -- many of them sick and in need of care. That influx would put an unprecedented burden on New York’s Medicaid system, threatening to cripple progress the state has made in recent years.

Uncertainty over the future is exacerbating Puerto Ricans’ desire to move to the mainland, says Ricardo Rivera Cardona, executive director of the Puerto Rico Health Insurance Administration. “It’s a trend that’s increasing exponentially. In 2010 we had 28,000 people leave the island. In 2014 that number jumped to 65,000,” he says. While New York may see the biggest impact, other states will be affected as more residents leave the island. New York still has more Puerto Ricans than any other state, but Florida is rapidly catching up. From 2005-2013, more than 130,000 Puerto Rican residents moved to Florida -- and only 43,000 moved to New York. Other states with already high Puerto Rican populations, including California, Connecticut, Massachusetts, New Jersey and Pennsylvania, would likely also be impacted.

For now, though, it’s New York that has promised solidarity with the island. Gov. Andrew Cuomo said last September that he would be dispatching his leading economic and health-care advisers to help get the island out of crisis mode. Since then, Jason Helgerson, New York’s Medicaid director and the lead architect of its reform plan, has had some two dozen meetings to discuss the partnership between the state, Puerto Rico and the federal Centers for Medicare and Medicaid Services (CMS).

New York’s Medicaid reforms have already brought spending down considerably: Since 2009, per-patient spending has fallen to 2003 levels, and overall spending has actually declined. Can officials replicate that success in Puerto Rico?

Right now, they’re waiting for permission from the federal government to begin working with the troubled territory, says Helgerson. “The ball is currently in CMS’s court. We haven’t been able to put forth an official proposal because they’ve flagged a few financing issues,” he says. So far, CMS hasn’t indicated when they might be ready to move forward. “It took them two years to approve our waiver, but Puerto Rico doesn’t have two years,” says Helgerson. “We are really looking to fast-track something this year.”

The first order of business will be to help close the island’s delivery gap. Recent years have seen a mass exodus of physicians and health-care specialists leaving Puerto Rico; doctors on the island make around $65,000 a year, a fraction of what they can make on the mainland. Some 360 physicians left Puerto Rico in 2014 alone, according to the territory’s College of Surgeons.

In addition to creating more and better paying health-care jobs in Puerto Rico, New York officials hope they can better implement electronic health records there. Only higher-end clinics use them, and virtually no hospitals on the island utilize electronic records. Putting them in place will help coordinate a patient’s care and reduce expenses. Officials also want to develop a coordinated system of managed care for aging patients, which is almost nonexistent on the island.

But until CMS gives some sort of green light on a plan, it’s tough to say how the rest of the year will play out. Giving Puerto Ricans access to the federal healthcare.gov insurance exchange would help, but that would require congressional action. Capitol Hill has been ambivalent on taking steps to help the struggling territory, and any action is unlikely in the next several months. “It’s become a devastating spiral -- when finances are bad, health and human services are typically the first things to get cut,” says Benjamin Sommers, a health-care economist. “But because these people are still citizens, they can just get on a cheap flight to the mainland and use Medicaid funds here.”

Congress could still act, of course, and some are hopeful that federal lawmakers could help craft a solution. President Obama has urged Congress to take some sort of steps to protect the island, and that alone is cause for optimism, say Puerto Rico’s  Rivera Cardona and others. But in the meantime, it’s been left to New York to do the heavy lifting. “I don’t think the solutions to this situation should fall to one state,” says Sommers. “But we’re just not seeing movement on the federal level right now.”

Ultimately, it’s up to the territory to make sure any funding and initiatives get properly implemented. What New York provides will simply be a road map for the way forward. “We’re not trying to dictate to Puerto Rico exactly what needs to get done,” says Helgerson. “We just want to give them advice and counsel, because the status quo there just isn’t sustainable.”