Allows use of Medicaid funding for Covid-19 emergency to cover uninsured until the end of September 2021
SAN JUAN – Citing the gravity of the Covid-19 pandemic, Puerto Rico’s Financial Oversight and Management Board (FOMB) approved on Friday a government of Puerto Rico petition to temporarily expand Medicaid coverage under the Vital public health plan to more than 200,000 residents without insurance until the emergency federal funding expires on Sept. 30, 2021.
By law, the federal government covers only 55% of the commonwealth’s Medicaid expenditures with a maximum annual cap currently set at $ 390 million, but it temporarily expanded that coverage due to the Covid-19 emergency to 82.2%.
FOMB Executive Director Natalie Jaresko said in a press release that the potential loss of federal funding makes a permanent expansion of Vital, at an estimated cost between $ 300 million and $ 600 million annually, “unaffordable to the Puerto Rico government in the current fiscal crisis without a long term or permanent equitable increase in Federal Medicaid funding ”for the island.
“Medicaid has been a lifeline for almost 40% of Puerto Ricans, and the global pandemic has shown how important reliable medical insurance is particularly for many families who struggle to find affordable healthcare,” Jaresko said. “When Federal funding is available, we agree we must try to find a way to maximize utilization efficiently, but in a fiscally responsible way. Together with the Government, we believe we have found a way to do so during this current health crisis. ”
Gov. Wanda Vázquez Garced said in a press release that FOMB’s decision to allow the use of Medicaid funding for the temporary inclusion of the 200,000 uninsured islanders in the Vital plan, as was requested by her and Puerto Rico Health Secretary Lorenzo González Feliciano during a meeting with the oversight board last week in New York, was “excellent news for Puerto Rico.”
“This was a commitment I made in my [State of the Commonwealth] message to be able to do justice to 200,000 people so that they can have a medical plan, ”the governor said in a statement.
“The determination comes after several processes in which the oversight board had refused to allow the inclusion of people without a medical plan who could have the benefits of medical coverage in the midst of a pandemic,” stated Vázquez, who also met in New York with personnel from the US Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS). “Now we work with the requested information so that together we can provide them with that opportunity for health and life.”
González said that the approval of the extra Medicaid funding to expand coverage of Vital will not only help beneficiaries face the Covid-19 pandemic, but will also allow them to continue to treat their other health conditions, including chronic illnesses, in an uninterrupted fashion.
“I thank the governor and the oversight board for their trust in the plan that was delineated so that this achievement became reality,” the Health chief said in a statement. “We are working together with CMS so that it approves a Disaster Relief Spa that will allow us to offer the opportunity of health and life to the new beneficiaries who qualify.”
For his part, Omar J. Marrero, executive director of the Fiscal Agency and Financial Advisory Authority (Aafaf by its Spanish acronym) and the commonwealth’s chief financial officer, said in a statement that the oversight board agreed to the temporary Vital expansion plan after “ numerous meetings ”in which the administration“ insisted ”on an“ egalitarian health system ”with the increased Medicaid funding. He said FOMB’s decision “leaves aside the uncertainty that thousands of Puerto Rican families were going through when these federal funds were at risk.”
“We will collaborate to allow this temporary expansion to be done in a fiscally responsible and effective way,” Marrero said. “Such a determination reflects the disposition and ability of our administration to work in good faith, looking out for the best interests of the people of Puerto Rico.”
Waiting on the commonwealth’s plan, funding
In the oversight board’s press release, Jaresko said that FOMB approved the temporary expanded Vital coverage for the uninsured islanders be done through a special program tied to President Trump’s declaration of a national emergency and the HHS Secretary Alex Azar’s declaration of a public health emergency concerning Covid -19.
The public health emergency allows the Puerto Rico government to utilize Section 1135 of the Social Security Act, which waives certain requirements for a State Plan Amendment (SPA) with the Federal Government defining how Medicaid is administered, Jaresko explained, stressing that the commonwealth will be seeking approval of CMS to quickly pass an SPA that would temporarily increase the eligibility of Medicaid coverage in Puerto Rico.
The SPA tied to the Section 1135 waiver would expire as soon as the public health emergency is ended or Sept. 30, 2021, the FOMB executive director said, noting that should the public health emergency end before Sept. 30, 2021, the Puerto Rico government would file an SPA to temporarily increase the income threshold to that date.
Jaresko said that the government would be required to amend Vital’s contracts with managed care organizations (MCOs) to reflect that the coverage under the SPAs would end on Sept. 30, 2021. The oversight board, she said, would also require the commonwealth to launch a campaign to inform eligible individuals and families, as well as health care providers and MCOs, about the temporary program.
The commonwealth must now identify the necessary funding to pay for Puerto Rico’s share of the federally funded Vital health insurance program, Jaresko said.
“Federal funding is not guaranteed at the levels Puerto Rico receives right now. Without that funding the Government of Puerto Rico cannot afford to expand eligibility, ”she said in the press release. “That is why the Government must be upfront and clear: expanding the eligibility of Medicaid ends in September 2021 unless Congress approves a long-term, fair solution to Puerto Rico’s Medicaid funding.”
Jaresko said the oversight board is expecting to receive “detailed information from the Government outlining what the proposed expansion specifically would change regarding income qualifications, as well as expected increased temporary enrollment.”
“The Oversight Board remains ready to work with the Government of Puerto Rico to enable this temporary expansion in a fiscally responsible fashion,” she said.
The government-subsidized Vital program has contracts with private insurers to cover some 1.1 million medically indigent people residing on the island. The four MCOs currently providing coverage in the plan are First Medical, MMM, Plan de Salud Menonita, and Triple-S.