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Editorial & Column


Unequal Treatment


October 16, 2003
Copyright © 2003 CARIBBEAN BUSINESS. All Rights Reserved.

"You get what you pay for." So goes the old saying. When it comes to Medicare benefits for Puerto Rico, however, the saying isn’t true at all.

The unequal treatment Puerto Rico receives under most federal programs is a highly complex and hotly debated issue. It is made more difficult by the nature of Puerto Rico’s relationship with the rest of the U.S.

In a nutshell, for decades the U.S. Congress has argued that it can treat residents of Puerto Rico differently than it does residents of the 50 states because Puerto Rico isn’t a state and residents of Puerto Rico don’t pay federal taxes. For decades, that has been a very tough argument to counter. If Puerto Rico doesn’t contribute its fair share to the national coffers, how can it expect, much less demand, an equal share of the federal funds for federal programs?

But in the case of Medicare, that rationale simply doesn’t apply. American workers in Puerto Rico and their employers pay the same amount of federal payroll tax for Medicare as do Americans living on the U.S. mainland, and senior citizens in Puerto Rico pay the same in deductibles and copayments.

The problem for hospitals in Puerto Rico is that they are reimbursed substantially less for the care of the elderly than hospitals on the U.S. mainland are for the elderly they attend. That’s because the Medicare law requires that payments to hospitals in Puerto Rico be made according to a significantly different formula.

According to local hospital administrators, hospitals in Puerto Rico are losing $74 on every one of the 137,000 elderly Medicare patients that receive treatment. That translates, they say, into a net loss annually for member hospitals of $10 million. That, in turn, makes it a financially uphill battle for hospitals in Puerto Rico to increase salaries, acquire new equipment, expand facilities, and improve patient services–not just for the elderly, but for all of their patients.

In fact, the financial impact on hospitals of the unequal treatment in terms of Medicare reimbursements is getting worse. Figures provided by U.S. Department of Health & Human Services show that even though the number of Medicare recipients in Puerto Rico grows every year and the cost of providing the services they require goes up, the amount of Medicare reimbursements Puerto Rico has received actually decreased by $100 million in the last year for which statistics are available, from $1.5 billion in federal fiscal year 2001 (ended Sept. 30, 2001) to $1.4 billion in FY 2002.

The proposal now under consideration by the House-Senate conference committee that is dealing with the overall Medicare reform bill would bring Puerto Rico closer to parity with the 50 states and other territories in terms of Medicare reimbursements, although not 100%. The details are thoroughly explained in our front-page story today.

Unless this problem is tackled now, it will get much worse in the years to come. Of the 40 million people over age 65 throughout the U.S., 525,000 are in Puerto Rico. This is 14% of the island’s population. Furthermore, the percentage of Puerto Rico’s population over 65 will increase to 20% within five to 10 years. This means hospitals in Puerto Rico will be severely handicapped until equitability is achieved–always running to keep up, much less catch up.

For now, the proposal under consideration by the conference committee deserves Congress’s full support even though it only increases the reimbursement to 75%. Eventually, though, Puerto Rico should be accorded full parity under the federal Medicare program.

After all, Puerto Ricans, not unlike other Americans, should at the very least get what they pay for.

This Caribbean Business article appears courtesy of Casiano Communications.
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