How Medicare leaves Puerto Ricans behind

When I accompany my father to his regular cardiologist appointment in Puerto Rico, worry and sadness always come along with us. While treatment has kept his health stable, I am still troubled that he always has to ask his doctor for medication samples.

If he lived in any of the 50 states, Medicare would have provided coverage for his medical needs. But because he lived in Puerto Rico, Medicare is far less useful to him.

Puerto Ricans contribute to several federal taxes, including Medicare payroll taxes. They are entitled to some Medicare coverage, such as Part A hospital insurance. But they are excluded from critical federal benefits such as Supplemental Security Income and the Medicare Part D low-income subsidy, a federal program that helps pay for out-of-pocket costs of medications associated with the doughnut hole. (That’s what my father falls into.) For those battling chronic diseases in Puerto Rico, those extra costs add up. Even what Medicare does cover is more difficult to access in Puerto Rico: In the mainland United States, enrollment in Medicare Part B is automatic, but Puerto Ricans must proactively sign up for it, which many don’t.

Puerto Rican residents face profound health care disparities with the mainland United States including higher rates of conditions like diabetes and heart disease, lower-quality care exacerbated by reduced Medicare reimbursement rates, shortages of specialists and medications, and restrictive federal health policies.

Health care funding in Puerto Rico is deeply unequal. This stems partly from statutory restrictions on federal health programs like Medicaid and Medicare in Puerto Rico. For example, Medicaid funding is provided to Puerto Rico through a fixed block grant rather than being open-ended based on need as it is in the 50 states. On a per-beneficiary basis, Puerto Rico receives a fraction of the Medicaid funding provided to the poorest U.S. states. The discrepancy is not because health care inherently costs less in Puerto Rico.

Puerto Rican citizens hoped that Medicare Advantage plans might help them access better care. But even there, they are at a disadvantage. Puerto Rico receives nearly 40% lower Medicare Advantage benchmark rates per enrollee compared with the average benchmark rate in the U.S. states. This means the maximum payment amount set by the federal government is substantially less for each Medicare Advantage enrollee in Puerto Rico versus an enrollee in one of the 50 states. Lower reimbursements limit funding for health care resources, potentially resulting in inferior services and reduced access to care. Furthermore, these reduced payments reduce compensation and may dissuade health care providers from participating in Medicare Advantage plans in Puerto Rico, leading to a smaller network of available professionals and specialists. Many leave Puerto Rico to work for Medicare Advantage plans on the U.S. mainland, where earnings potential is much higher. For example, physicians in Puerto Rico earn approximately $162,260 per year on average, compared with a U.S. average salary above $229,300. The resulting provider shortages further strain Puerto Rico’s health care system access and quality.

The 50 states have Medicare Savings Programs to help low-income beneficiaries pay Medicare expenses, but Puerto Rico does not. This many elderly beneficiaries like my father without crucial assistance in affording premiums and cost-sharing for outpatient care. While some “dual eligibles” get additional help from Medicaid, without distinct Medicare Savings Programs, others can’t cover out-of-pocket costs, potentially deterring them from seeking necessary medical attention or preventive care. Ultimately, this unequal access to Medicare benefits and cost-sharing assistance contributes to a scenario where low-income elderly Medicare beneficiaries in Puerto Rico may experience inferior health care services compared with their counterparts in the states.

There are very limited efforts in Congress to justify or address Medicare funding disparities facing Puerto Rico. Occasional bills have aimed to incrementally improve hospital or Medicare Advantage payments. In 2022, for instance, a bipartisan House bill proposed creating a Medicare Advantage benchmark floor for Puerto Rico to increase payments.

However, no systemic reforms have advanced due to higher priorities around tax disputes and deficit concerns. Puerto Rico’s resident commissioner, who sits in Congress, has advocated for funding equity but lacks full voting power to sway change.

One good development is that the Inflation Reduction Act’s drug price negotiation will also reduce insurance premiums and out-of-pocket costs for Puerto Rico residents. However, the program will include just 10 drugs to start with, leaving many others out of reach for financially strained populations like those in Puerto Rico. And frankly, the negotiated drug prices may still be prohibitively expensive given widespread poverty and lack of savings programs on the island.

Achieving true Medicare equity requires extending eligibility for low-income support programs to Puerto Rico, paying health care providers there based on local costs rather than unfair mainland rate benchmarks, enabling drug price negotiations, automatically enrolling beneficiaries in Part B as occurs on the mainland, and ensuring a minimum reimbursement level tied to average U.S. rates. Analyzing the feasibility of improving traditional, fee-for-service Medicare as an alternative to primarily relying on Medicare Advantage, too.

These changes would provide equitable access, financing, and benefits for Puerto Rico Medicare beneficiaries commensurate with their tax contributions. Medicare should allocate funding based on need — not unequal territorial status.

Mariela Torres Cintrón is a Public Voices fellow of The OpEd Project and AcademyHealth and an assistant professor at the University of Puerto Rico, Medical Sciences Campus, School of Public Health.