The secretary of the Department of Health, Víctor Ramos, and the executive director of the Health Insurance Administration (ASES), Carlos Santiago Rosario, expressed confidence Monday that the current administration’s efforts with the federal government to secure adequate funding for Medicaid in Puerto Rico will succeed. The program funds a large portion of the government’s health plan.

Ramos said he does not expect beneficiaries of the Vital health plan to be affected next year.

“The Department of Health and ASES are not considering reducing coverage or excluding beneficiaries from the Vital health plan as an alternative. On the contrary, Puerto Rico’s government strategy focuses on getting Congress to approve a legislative solution before October 1, 2027,” the health secretary said during a public hearing held by the Senate Government Committee.

Through the current federal fiscal year, Puerto Rico’s Medicaid program has been funded through an extraordinary allocation that increased the cap on the federal matching funds the island can receive. That allocation has been in effect since 2023. This fiscal year, Puerto Rico will receive approximately $4.2 billion in federal funding for the government’s health plan, Santiago Rosario said.

Without the extraordinary five-year allocation, Puerto Rico would receive a maximum of $500 million, Ramos recalled.

In response to questions from Senator María de Lourdes Santiago, Ramos acknowledged that “the worst-case scenario” for Puerto Rico would be a return to the $500 million allocation.

“The worst-case scenario is truly bleak. For all practical purposes, it would destroy Puerto Rico’s healthcare system because we’re talking about a system that needs $4 billion, and we would be trying to subsidize it with $500 million. Simple math tells us that doesn’t add up,” said Senator Ángel Toledo, chair of the Government Committee.

Ramos and Santiago Rosario presented the committee with the final report from the multisector committee established by La Fortaleza to seek a new Medicaid allocation. The report estimated that up to one million people could lose coverage under the Vital health plan if Congress does not provide additional funding before October 1, 2027.

The health secretary explained that spending on the Government Health Plan spiraled out of control toward the end of the previous four-year administration, when services were added for beneficiaries—including hospice care and durable medical equipment—without conducting an actuarial study of the financial impact. He said his administration has negotiated cost reductions without affecting benefits.

Santiago Rosario also said they have implemented cost-cutting measures, including increasing participation in a prescription drug rebate program, which is projected to generate an additional $80 million this year.

“We have pursued various cost-saving measures that we are presenting to the federal government to demonstrate that we are not simply seeking money to spend it, but that we are also responsibly managing public resources,” ASES’s executive director said.

Puerto Rico’s government has joined forces with industry leaders to deliver a unified message in Washington, D.C., the health secretary said, seeking a $4.815 billion allocation for federal fiscal year 2028 to maintain current services.

Without a new federal law, the $4.2 billion available this year would drop to approximately $500 million on October 1 of next year, the amount provided under the permanent statute. In addition, the federal Medicaid matching rate would fall from the 76% received in recent years to 55%.

This funding drop is known as the fiscal cliff, or the “Medicaid cliff.”

Ramos lamented that the island is treated differently from other U.S. territories, which receive an 83% federal matching rate—the same as the states—but are subject to funding caps that do not apply to states.

The government of Puerto Rico finances approximately one-fifth of the Vital health plan, which had 1.36 million registered participants as of last December.

Santiago Rosario said a portion of Vital is funded with local government funds because it covers people who would not qualify for Medicaid. That portion costs the government approximately $300 million.

Ramos said U.S. Health and Human Services Secretary Robert F. Kennedy Jr. has expressed support for maintaining or increasing the federal contribution to Puerto Rico. However, when Senator Santiago asked whether that position had been stated in any written communication, Ramos said he did not know.

“We’ve discussed it,” the secretary said.

Toledo, meanwhile, raised concerns about the potential impact of the November midterm elections, in which all seats in the U.S. House of Representatives and one-third of the seats in the U.S. Senate will be contested. A change in the composition of Congress could force members of the multisector committee to restart their outreach efforts with new lawmakers, the senator noted.

ASES’s executive director reiterated that they expect congressional action at some point next year, but it remains unclear which bill could include provisions for Puerto Rico’s Medicaid program.

“We have tried to convey to the people of Puerto Rico that, as an administration, we have done what we need to do to avoid reaching the ‘Medicaid cliff,’” Santiago Rosario said. “There is something we cannot control, which is when it will happen, but we know the message we are taking to Congress is getting through. We see openness among lawmakers and congressional staffers,” he added.

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This content was translated from Spanish to English using artificial intelligence and was reviewed by an editor before being published.