Post on 26-Mar-2015
transcript
CONGRESSMAN PEDRO R. PIERLUISI
SPEAKEROF THE U.S. HOUSE OF REPRESENTATIVES NANCY PELOSI
Panel on Federal Ecomomic Recovery and Health Reform Initiatives
in Puerto Rico
The American Recovery and Reinvestment Act
• The Recovery Act became law in February 2009. The purpose of the
bill is to stimulate the struggling national economy and to reduce
unemployment. Thanks to the support of allies like Speaker Pelosi,
nearly all of ARRA’s provisions―formula grants, competitive grants
and even certain tax credits―ultimately applied to Puerto Rico and
the other U.S. territories.
• As of July 16th, Puerto Rico had received $4 billion under ARRA
(Source: Office of the Vice President). It is estimated that the Island
will receive more than $2.5 billion more over the remainder of this
year and 2011. (Source: Government of Puerto Rico).
The American Recovery and Reinvestment Act
● This funding has served as a lifeline for the struggling Island economy,
preventing a difficult situation from becoming far worse. Puerto Rico’s
current unemployment rate is 16.3%, well higher than any state.
Nonetheless, this number would be significantly higher if it were not for the
Recovery Act, which saved or created thousands of jobs on the Island.
● The billions of dollars in stimulus money is being used, for example, to save
and create jobs in various sectors, to help Island schools and students, to
construct roads and bridges, to support and retrain unemployed workers, to
provide food aid and affordable housing to low-income residents, to improve
the quality of drinking water, and to support clean-energy projects.
The American Recovery and Reinvestment Act
Residents of Puerto Rico were even included in certain tax credit programs established in ARRA from which Island residents are usually excluded.
Puerto Rico workers are receiving the Making Work Pay tax credit, which provided
up to $400 dollars per individual and $800 dollars per family in 2009―and is doing so again in
2010. The importance of this credit, which puts money directly into the pockets of hard-
working Puerto Ricans, cannot be overstated.
Island students and their families are receiving the American Opportunity tax credit created by
the legislation, which will provide a credit of up to $1,000 (per eligible student per year) for
college tuition and related expenses.
Both credits are being offered at the local level, with the Puerto Rico treasury being reimbursed
by the federal treasury for the lost revenue. (This mechanism is necessary because residents
of Puerto Rico are not required to pay federal income taxes on their local income.)
The American Recovery and Reinvestment Act
• ARRA also temporarily increased the federal contribution to Puerto
Rico’s Medicaid program by 30%. At the time, this represented the
largest increase in funding to Puerto Rico’s Medicaid program in the
Island’s history, although it would later be surpassed by the increase
provided in the Affordable Care Act. Early versions of ARRA provided
a much smaller funding increase to Puerto Rico and the other
territories―15% or less. But thanks to the help of Speaker Pelosi and
others, the final bill doubled the increase to 30%.
The American Recovery and Reinvestment Act
• This increase―which applied in fiscal year 2009, fiscal year 2010,
and the first quarter of fiscal year 2011―translates into more than
$185 million in additional federal funding during this time period to
help Puerto Rico provide health care to our most vulnerable
residents.
Congress recently extended this 30% increase for another six
months in the Education Jobs Act and Medicaid Assistance, which
translates into $45 million in additional federal funds for Puerto Rico’s
Medicaid program.
The Affordable Care Act
Background● In March 2010, the landmark health care reform legislation known as the
Affordable Care Act was enacted into law.
Residents of Puerto Rico have always been treated differently than their
fellow citizens in the states under federal health programs.
The most extreme case is Medicaid, a joint federal-state program that
provides health care to the poor. The federal government pays a significant
share of the program’s cost in the states―no less than 50 percent for any
state and up to 83 percent for certain states.
The Affordable Care Act
● By contrast, federal law imposes an annual cap on funding for Puerto Rico’s Medicaid
program. The cap was so low that, over the years, the federal government typically
paid about 18percent of Medicaid costs on the Island.
● In light of such disparate treatment, the ACA represented a once-in-a-generation
opportunity to redress, or at least to mitigate, these unprincipled disparities.
● During the debate over the ACA, Speaker Pelosi was absolutely instrumental in
ensuring that the final bill treated Puerto Rico and the other U.S. territories in a fair
manner.
● The process was difficult, but the final result was extraordinary.
Medicaid
● Under the ACA, federal funding for Puerto Rico’s Medicaid program almost
tripleover the next decade. If the ACA had not passed, Puerto Rico would
have received about $3.1 billion between 2011 and 2019. With the ACA, it
will receive about $8.6 billion.
● Early versions of the bill imposed strict restrictions on how this money could
be used and would have delayed allocation of most of the funding until 2014.
By contrast, the final bill provides Puerto Rico with the new money beginning
in 2011 and gives the Island flexibility to use this funding to most effectively
expand coverage and improve care for its most vulnerable residents.
The Health Insurance Exchange
Although earlier versions of the bill excluded Puerto Rico from the
health insurance exchange, which will come into effect in 2014,
the final bill expressly authorizes Puerto Rico to establish an
health care exchange.
Puerto Rico will receive $925 million to provide premium and cost-
sharing subsidies to residents who qualify for the exchange. If
Puerto Rico elects not to operate an exchange, the Island will
receive this $925 million as additional Medicaid money between
2014 and 2019.
Consumer Protections and Insurance Market Reform
As Secretary Sebelius recently confirmed, nearly all of the consumer
protections and insurance market reforms established in the ACA will
apply in Puerto Rico.
Because of the ACA, insurance companies in Puerto Rico, like insurers
in the states, will no longer be able to:
deny coverage based on pre-existing conditions
terminate coverage when an individual gets sick,
establish lifetime or annual limits on benefits,
Consumer Protections and Insurance Market Reform
Puerto Rico will be required to:
make dependent coverage available to adult children until the age of 26
Submit a justification for any ‘unreasonanle’ increases in premium to the state and federal government
implement an effective appeals process so that patients can appeal decisions such as a claim denial. This prohibitions takes effect this year (for new plans)
Provide coverage for certain health services such as vaccinations
• In addition, Puerto Rico is eligible to obtain funding under multiple
federal grant programs created by the ACA, which are designed to
help jurisdictions enforce these various reforms.
Pending Issues in Congress of Importance to Puerto Rico
• Although much has been accomplished on the health care front, some work
remains to be done, particularly relating to the funding provided by the HITECH Act
for the use of electronic records by Puerto Rico hospitals and with respect to
Medicare. Puerto Rico is subject to unequal treatment under this federal program
in several respects.
• The HITECH Act, enacted as part of ARRA, provides incentive payments to doctors
and hospitals under both Medicaid and Medicare to become meaningful users of
electronic health records. The bill inadvertently excluded Puerto Rico hospitals
from the Medicare bonus payments. I have introduced legislation (H.R. 4669 ) to
rectify this mistake, which is supported by the Puerto Rico Hospital Assocation and
the American Hospital Association. Senator Menendez is championing the fix in
that chamber.
Pending Issues in Congress of Importance to Puerto Rico
In addition, with respect to Medicare, I have introduced legislation (H.R.
1501 ) to correct the disparity in the way that Puerto Rico hospitals are
reimbursed by Medicare. Under current law, our hospitals are paid
significantly less per admitted patient than hospitals in the states. This
is because Puerto Rico is the only jurisdiction that does not receive 100%
of the national payment rates. Instead, payments to Puerto Rico
hospitals are derived from a blended formula that is based on 75% of the
national rates and 25% of the local Puerto Rico rates It is estimated that
this fix would increase the total Medicare reimbursements to Puerto Rico
hospitals by at least $24 million per year, which would greatly improve
patient care on the Island.
Pending Issues in Congress of Importance to Puerto Rico
Another important disparity that we face in Medicare deals with Part B
coverage (medical services). Unlike anywhere else in the United States,
Medicare beneficiaries in Puerto Rico are forced to apply for Part B
coverage. Many do not until they realize they need it. This causes them
to deal with severe lifelong penalties for not having done so on a timely
basis. This coverage is automatic everywhere else and so it makes no
sense that we are treated differently
Fixing this disparity would not have a fiscal impact on the program.
Thank you