Puerto Rico’s hurricane recovery held back by policy decisions to shortchange island

Federal response to Puerto Rico's health woes has always fallen short because lawmakers won't address its Medicaid funding problem.

Due to the financial crisis, up to 700 doctors were expected to leave Puerto Rico in 2016, double the number from two years ago. (AP Photo/Carlos Giusti)
Due to the financial crisis, up to 700 doctors were expected to leave Puerto Rico in 2016, double the number from two years ago. (AP Photo/Carlos Giusti)

President Donald Trump will be visiting Puerto Rico on Tuesday to witness first-hand the damage caused by Hurricane Maria and meet with residents who still lack basic necessities. The island — home to more than 3.4 million U.S. residents — is mostly without electricity or running water since Maria made landfall as a major Category 4 hurricane on September 20.

The political and public response to the catastrophe has been muted compared to that of Hurricane Harvey and Irma, which hit Texas and Florida, respectively. Perhaps this is because a lot of people don’t realize Puerto Ricans are Americans too. But the perception that Hurricane Maria is a foreign disaster rather than a domestic one isn’t accidental; Puerto Rico has historically been excluded. Puerto Rico is not a state but a U.S. territory, and Puerto Ricans cannot vote in presidential elections or have representation in Congress.

“Puerto Ricans are treated as second class citizens,” Edwin Meléndez, director of the Center for Puerto Rican Studies at Hunter College in New York, told ThinkProgress. “They are an afterthought and that’s a direct impact of American policies.”

Puerto Rico’s exclusion is also abundantly clear in the way Congress decided to fund its Medicaid program, Mi Salud. The disparity is often thought of as the beginning of Puerto Rico’s health care woes, and it will become even more obvious as San Juan tries to respond to its current public health emergency.


Given the high unemployment and poverty rates, almost half of Puerto Ricans are covered by Medicaid, a program that provides insurance to low-income, elderly, and disabled persons. The territory — that’s long struggled financially and declared bankruptcy in May — receives less Medicaid federal funds than all other 50 states and District of Columbia.

In 1968, Congress “capped” federal financial participation in the Medicaid program in U.S. territories because most residents there do not pay federal income tax. (In addition to domestic taxes, Puerto Ricans do pay other federal taxes like Social Security, Medicare, import/export and commodity.) Every state receives a federal matching percentage that ranges from 50 to 83 percent depending on the state’s average income per person in a given year. Despite Puerto Rico’s slow per capita income growth, its federal matching rate could not exceed 50 percent; it was raised to 55 percent when the Affordable Care Act (ACA) was launched. The program’s total federal allotment is capped annually as well. Generally the island exhausts its federal share prior to the end of each fiscal year, even without a major natural disaster striking. (Just this year, before Hurricane Maria hit, the island almost ran out of money and nearly triggered a “Medicaid cliff” until Congress provided short-term funding.)

Puerto Rico lawmakers have long pleaded with Washington, D.C. to change the current financing structure. In a 2005 letter addressed to the U.S. Department of Health and Human Services, then-executive director of the Puerto Rico Federal Affairs Administration Eduardo Bhatia described the federal government’s shortfall:

“During the past 37 years the Commonwealth of Puerto Rico’s Federal Matching Assistance Percentage (FMAP) has effectively shrunk from 50 percent to 18 percent… If the Puerto Rico Medicaid cap enacted at $20 million in 1968 would have grown at the same rate the Medicaid program has grown, the cap today would be about $1.7 billion instead of its current $219 million. Puerto Rico would not only have a different Medicaid program today, but it would have a different healthcare system.”

The Obama administration had an opportunity to right past wrongs with the passage of the ACA in 2010 but did not, said Meléndez. “We just can’t blame Republicans,” he said. The ACA did not adequately address the insufficient federal Medicaid funding that has long plagued the island. Instead, the ACA provided two temporary sources of Medicaid funding in additional to its annual block grant. Already that funding has been depleted.

The island riddled with health crisis 

The policy decision to shortchange Puerto Rico isn’t without consequences. And while a public health crisis is playing out most visibly today — with hospitals struggling to remain open and people dying due to medical supply shortages — Puerto Rico has been inching closer towards a health care catastrophe for years.


There has been an accelerated decline in the number of physicians, as doctors left the island for economic security. Due to insufficient pay and training, doctors have migrated to the mainland. Seventy-two of Puerto Rico’s 78 municipalities have been deemed medically underserved by the U.S. Health Resources and Services Administration (HRSA). As patients require more concentrated care, finding a specialized doctor becomes more cumbersome: 23 percent of municipalities had a shortage of pediatricians, 68 percent had a shortage of OBGYNs, and 64 percent had a shortage of psychiatrists.

Prior to Hurricane Maria, the highest priority for the health care providers and experts in Puerto Rico was addressing the inequities in financing Puerto Rico’s Medicaid program, according to a January 2017 Urban Institute Study. Based on evidence accrued in state health assessment data, focus groups, and informal reports, restructuring the public health insurance program and payment environment would improve the island’s ability to address doctors shortages and in turn patients health needs.

During G.O.P. efforts to repeal and replace the ACA this summer, the public became more aware of the effects of restructuring public health insurance as a block grant. In fact, drastic cuts to the Medicaid program under block grant proposals stopped legislation like the Graham-Cassidy bill from moving forward.

“The current low FMAP rate provided to Puerto Rico will make the recovery harder,” Dr. Krista Perreira, a public policy professor at the University of North Carolina at Chapel Hill that co-authored the Urban Institute study, told ThinkProgress in an email. “In 2011-2014, the U.S. Congress provided a special adjustment for disaster recovery to Louisiana’s FMAP rate. Similarly, they should consider increasing the FMAP rate for Puerto Rico, especially as the island works towards recovery.”

The mosquito-borne Zika virus that troubled the island in 2016 and caused birth defects is the most recent example of how inadequate Medicaid federal funding hinders long term recovery efforts.


“Their Medicaid program has deep problems and is unable to pay physicians,” said Thomas Frieden, former director of the Centers for Disease Control and Prevention, told RollCall last year. “One of the things that the [nonprofit] CDC Foundation is working on is a way to reimburse physicians for care they provide for women who choose not to become pregnant during this time. It’s making an incredibly difficult situation even harder.”

Trump’s turn 

The federal government has provided Puerto Rico with some relief, but it’s still not enough. “We need to do a lot more in order for us to get out of the emergency,” said Puerto Rico Gov. Ricardo Rosselló in San Juan. “But the other thing that’s also true is that the [Trump] administration has answered and has complied with our petitions in an expedited manner.”

The president has approved disaster declarations and scheduled a visit to the hurricane-ravaged island for this week. Additionally, the White House has amended its initial disaster declaration by instructing the federal government to cover 100 percent of the Federal Emergency Management Agency (FEMA) bill. FEMA would typically provide assistance on a cost-shared basis. The administration also waived the Jones Act and temporarily lifted shipping restrictions, which would enable the island to receive necessary aid.

The aforementioned response is short-cited. “The question becomes does [Puerto Rico] want to go back to Congress every three months and ask for more money,” said Meléndez. Given the island’s current health crisis coupled with the inadequate funding, Puerto Ricans will have to. Does this Congress, does this administration have the appetite to handle that, he added.

Critics have likened the Trump Administration’s action thus far to the Bush administration’s lethargic response to Hurricane Katrina in 2005. The President’s inability to accept criticism, and instead turn the crisis into a ‘cultural war‘ may triumph Bush’s meager action.

“They… want everything to be done for them when it should be a community effort,” said Trump in a string of morning Saturday tweets. To say Puerto Rico has received more than enough federal help is to dismiss the U.S. territory’s complicated relationship and history with Washington D.C.