Sanders proposes lifting Medicaid cap for Puerto Rico

New legislation from Sen. Bernie Sanders (I-Vt.) would lift the federal cap on Medicaid funding for Puerto Rico and the U.S. Virgin Islands in an attempt to put the territories on equal footing with the rest of the country.

The provision is part of a $146 billion recovery plan for Puerto Rico and the Virgin Islands that Sanders unveiled Tuesday, and could help the territories overcome a major Medicaid funding crisis.

“It is unconscionable that in the wealthiest nation in the world we have allowed our fellow citizens to suffer for so long,” Sanders said in a statement. “The full resources of the United States must be brought to bear on this crisis, for as long as is necessary.”

Hurricane Maria caused serious damage to Puerto Rico’s health care system, and none of the federal disaster relief money to date has been earmarked for Medicaid.

As a result of a funding cap set by Congress decades ago, Puerto Rico effectively receives less than 20 percent in reimbursements for Medicaid. If it were treated as a state, its reimbursement rate would be 83 percent.

Puerto Rico is subject to a hard cap of about $300 million a year. If the island’s government spends more than that amount, it must cover the cost.

Experts say the formula has forced the Puerto Rican government to cover a large portion of the costs from its own budget, contributing to the island’s debt crisis.  

The legislation would lift the funding cap, as well as the statutory 55 percent limit on federal matching for Medicaid in the territories beginning in fiscal 2019.

“This bill provides the help that the people of Puerto Rico and the U.S. Virgin Islands desperately need,” said Sen. Elizabeth Warren (D-Mass.), one of the bill’s co-sponsors. “It tells millions of U.S. citizens: we have not forgotten you.”

The other Democratic senators on the bill are Richard Blumenthal (Conn.), Kirsten Gillibrand (N.Y.), Kamala Harris (Calif.) and Ed Markey (Mass.).

Sanders, Warren, Gillibrand and Harris are all seen as possible candidates for the White House in 2020.

A $44 billion supplemental payment request from the White House said the administration was “aware” that Puerto Rico needed Medicaid assistance, but it put the onus on Congress to act.

The Sanders legislation, which was co-sponsored by five other Senate Democrats, is unlikely to get a vote in Congress.

Even before Hurricane Maria, Puerto Rico’s Medicaid program barely had enough money left to last through the next year.

Now, if the island’s federal Medicaid funding runs out, up to 900,000 people would likely be cut from Medicaid — more than half of total enrollment, according to federal estimates.