Fixing Puerto Rico's economy — fulfilling the promise of PROMESA

When Congress passed the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA) early this summer, it took a critical first step in getting Puerto Rico’s economy back on track.  
The law puts in place a process to address past fiscal issues, while also identifying reforms to improve Puerto Rico’s economic future.  
Currently, the law’s Congressional Task Force on Economic Development is hearing from stakeholders representing a variety of interests to determine which reforms Congress should pursue.
While we agree there must be a comprehensive approach to ensure a long-term, stable recovery in Puerto Rico, the conversation should start with the ailing healthcare sector.
Despite Puerto Rico’s inequitable treatment under federal law, healthcare is a critically important segment of Puerto Rico’s economy, employing about 85,000 people across the island. It also represents fertile ground for employment and economic growth.
Economists have projected that a $1 billion investment in Puerto Rico’s healthcare sector can result in an additional $680 million for the broader economy, almost 40,000 new jobs, and $410 million in additional income for Puerto Rican residents. That’s an impressive return on investment.  
Fixing Puerto Rico’s problems at the source can save taxpayer dollars later on. We are currently seeing unprecedented migration to the United States as the Puerto Rican economy struggles. During the last 5 years, over 350,000 individuals have left the island.
Over one-third of these individuals were eligible for Medicaid when they arrived on the mainland, where the program can cost about four times more than it costs in Puerto Rico. Making sure there is a vibrant economy and access to high-quality healthcare will allow more Puerto Ricans to stay on the island and contribute to its long-term growth.       
Bolstering the island’s healthcare sector makes good economic sense, but it is also the right thing to do. A recent poll found that over 7 in 10 voters believe that people living in Puerto Rico, despite living in a U.S. territory, deserve equal access to federal healthcare benefits. Unfortunately, this is not the case under current law.
People living in Puerto Rico are U.S. citizens that pay the same Medicare taxes as U.S. residents, yet, unlike other U.S. residents, they are prohibited from accessing financial assistance for the Medicare Part D program and they are not automatically enrolled in Medicare Part B.
Additionally, their highly-popular Medicare Advantage program receives about 43 percent less in reimbursement than the national average, despite having similar or higher input costs.
The disparities under Medicaid are just as bad.  Puerto Rico’s Medicaid program faces an unprecedented cliff in 2017 that could result in over 900,000 Puerto Ricans losing coverage. This is because money allotted by the Affordable Care Act (ACA) will dry up, leaving Puerto Rico with a $1.1 billion shortfall.
Moreover, Puerto Rico’s Medicaid program is capped at an arbitrary 55 percent federal matching rate, so the island is unable to pick up the slack when the ACA money is no longer available. This capped approach has also left the island unprepared and unable to appropriately respond when issues like the current Zika crisis arise.          
Lawmakers are beginning to take notice. Long-time supporters, like Resident Commissioner Pierluisi, have introduced comprehensive legislation to address many of Puerto Rico’s healthcare issues.
More recently, Republicans and Democrats introduced legislation to exempt Puerto Rico from the unfairly applied and burdensome health insurance tax that is raising costs for Puerto Rican residents. However, more help is urgently needed.  
Congress should address the most pressing issues, like Medicare Advantage and Medicaid funding, before the end of the year. The underfunding of these programs severely affects patients’ access to care and requires immediate solutions.
Additionally, the Congressional Taskforce on Economic Development should recommend longer-term solutions to address long-standing inequities in Medicare, Medicaid and the application of the ACA.  
Addressing these short and long-term healthcare problems will pave the way to a brighter economic future and fulfill PROMESA’s promise to the people of Puerto Rico.

James P. O’Drobinak is the CEO of Medical Card System Inc. and president of the Medicaid and Medicare Advantage Products Association of Puerto Rico.
By James P. O’Drobinak
Fixing Puerto Rico's economy — fulfilling the promise of PROMESA

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