Resident Commissioner Jenniffer González said she is hopeful that the U.S. Congress will take up legislation in its lame-duck session following next month’s midterm elections to address Puerto Rico’s newest federal healthcare funding cliff along with regulatory and policy issues at the Puerto Rico Electric Power Authority.
Puerto Rico received a Medicaid funding boost of nearly $4.9 billion under the
Bipartisan Budget Act of 2018. With the money, the federal government is covering 100% of Medicaid program funding costs in Puerto Rico, but the funding lasts only through fiscal year 2020, and there is a sharp drop in projected Medicaid funding after that.
González said that she is looking for any legislative vehicle to extend the Medicaid funding beyond 2020, but she also said that she is trying to develop a “permanent solution” to Puerto Rico’s federal healthcare funding issues. The resident commissioner said that she is in talks with members of the U.S. House Energy and Commerce Committee, including its chairman, U.S. Rep. Greg Walden, R-Ore., regarding the legislation, and has been in discussions with other members of Congress for the past several weeks.
“My intention is to achieve a permanent solution so that we are not doing this every two years,” González told Reorg during an exclusive interview Friday afternoon, prior to her participation in a Puerto Rico Chamber of Commerce healthcare forum.
The resident commissioner acknowledged that additional federal disaster legislation aimed at addressing Hurricane Florence and western wildfire damages is one possible vehicle for Puerto Rico and other territories to receive additional healthcare funding. She added that determining what shape the permanent fix for Puerto Rico’s Medicaid funding will take is the commonwealth’s “big challenge” in Congress right now. Two other sources familiar with the matter said there is bipartisan support for extending the Medicaid funding beyond 2020, though they said that the chances of passage are higher if the Democrats take control of the House of Representatives.
The Medicaid funding issue could have an impact on the commonwealth fiscal plan certified by the PROMESA oversight board that is used as a basis for debt restructuring negotiations. Because the fiscal plan includes only federal funding specifically appropriated by Congress, the fiscal plan shows a sharp drop in healthcare funding after fiscal year 2020.
Despite additional funding under the Patient Protection and Affordable Care Act and absent additional federal catch-up funding, Puerto Rico and other U.S. territories would get less Medicaid dollars than they would if treated like states. In a
report on Puerto Rico finances and debt issued in May, the Government Accountability Office noted that if Puerto Rico had been treated as a state in 2011, federal spending on Medicaid in Puerto Rico would have ranged from $1.1 billion to $2.1 billion, as compared with actual federal spending of $685 million.
Under the Affordable Care Act, Puerto Rico and other U.S. territories received an additional $6.4 billion over a six-year period that ends Sept. 30, 2019, plus an additional $900 million that would run through December 2019. However, Puerto Rico exhausted that funding more quickly than expected. Last year, the resident commissioner
estimated that Puerto Rico’s Medicaid allotment would drop to about $360 million from $1.68 billion without congressional action. Since then, Congress has passed legislation two times that provided additional Medicaid funding to Puerto Rico, extending the so-called “cliff” through fiscal 2020.
During a municipal bond market conference in New York City last month, Fiscal Agency and Financial Advisory Authority Executive Director Christian Sobrino
told investors that a major factor in Puerto Rico’s fiscal challenges is underfunding in the Medicaid program and other federal funding programs. He said the administration’s “major effort right now” is to “increase regular levels of Medicaid funding for the island." “We all know pretty well that if Puerto Rico had parity in Medicaid participation, a lot of the fiscal situations that we face now or could face in the future would essentially go away," Sobrino said.
González also said that draft legislation being developed regarding PREPA’s regulatory and policy issues should also be introduced after the midterm election next month.
Following a July 25
hearing on the role the federal government can play in depoliticizing PREPA and ensuring strong regulatory oversight over the island utility, U.S. House Natural Resources Committee Chairman Rob Bishop, R-Utah, put González in charge of developing draft legislation, but it’s still not clear what direction the legislation will take.
Some Natural Resources Committee members and witnesses expressed concern about the influence that the governor and other political leaders exert over PREPA and the ability of the Puerto Rico Energy Bureau to carry out its oversight powers, but González said Friday that her bill would be directed at enabling PREPA to increase its use of renewable energy and liquified natural gas. The resident commissioner said that she has
spent weeks taking suggestions from private-sector stakeholders, PREPA officials and PREB officials. She also said that federal officials, including U.S. Department of Energy officials, are also providing input.
The resident commissioner said the PREPA legislation is likely to be a “mixed bag” that will address several issues, including ensuring that Puerto Rico is able to maximize its use of renewable energy and LNG-fired power production. She said the bill would not address a Jones Act exemption to enable Puerto Rico to receive U.S.-based LNG via foreign flagged ships but said Congress is working to increase the amount of LNG that can be exported from the continental U.S., which she said is important for plans to develop Puerto Rico into a Caribbean energy hub.
González also said the bill would address regulatory and policy issues and would look to streamline “processes and bureaucracy.” She said she is aware that local lawmakers are developing similar legislation and said she would likely wait for that effort to shape before introducing a congressional bill.
The resident commissioner also said that the bill would address issues related to the disbursement of federal funding aimed at rebuilding the island’s electric grid. González said that she has received complaints regarding towns aiming to charge taxes to mainland contractors for the post-Maria emergency restoration work performed on the island but said it is not clear at this point if the PREPA bill would address the situation.