The local implementation of the ACA has run counter to many of the best practices being implemented on a national scale. This document highlights some salient issues which can have a significant impact on the future roll out of federal health policy in Puerto Rico and the local market. Our intent is to highlight these issues for further study and prompt action, as many of these issues are time sensitive.
INDIVIDUAL MANDATE – The IRS provisions that impose a penalty upon US residents who do not purchase health insurance do not apply to Puerto Rico creating a potential problem. This “individual mandate” is amongst the most important cost cutting ACA reforms and all the ACA provisions that increase health care spending apply locally. The Congressional Budget Office estimated that the implementation of the ACA without an individual mandate would increase health insurance premiums in the US by between 15 and 20 percent. A similar study has not been performed for Puerto Rico, but we believe that a lack of an individual mandate would create for a similar situation for the Island. This is a time sensitive issue, as cost increasing ACA provisions are already in effect and will increase pressure on the local market.
HEALTH INSURANCE EXCHANGE (Exchange) - The Centers for Medicare and Medicaid Services (CMS) extended their deadline for jurisdictions to submit their intent and plan to develop a local Health Insurance Exchange (HIE). Not adopting a HIE would have several negative consequenses on the Island in the short and long term. Of particular concern would be the lost opportunity of requesting federal funding for Exchange Infrastructure which is estimated at $35 million with no match which can be used to revamp ASES technical infrastructure and insuring 50K additional people. Additionally, HIEs are a core component of the ACA and future federal funding opportunities are likely to require a HIE infrastructure. This situation is different for States, which can request to form a part of a federal HIE, however, this alternative is not available for Puerto Rico.
MEDICAID – Alignment between Medicaid and Exchanges is seen as a basic tenant of ACA, which is concerning because the current miSalud model does not abide by this tenant. Medicaid in Puerto Rico will be in a better financial position from 2011 to 2019 due to the $5,477 billion federal funds increase for this program. However, not engaging in an Exchange can limit access to future federal funding opportunities because we will not have the systems in place to comply with standard Exchange related practices across the states. Additionally, incorporating Medicaid to the Exchange is seen as an added opportunity for government to leverage its financing power to impact health insurance premium rates, quality of care and benefits for the overall market.
ACCOUNTABLE CARE ORGANIZATIONS (ACO) – Due to a more than 70% enrollment of elderly patients in the Medicare Advantage program, developing an ACO under the current CMS ruling in Puerto Rico is extremely difficult because only a handful of providers have 5,000 enrolled Medicare fee for service patients (MFFS) which is a pre-requisite for applicants. This leaves providers on the Island at a severe disadvantage in accessing ACO-related funding, much of which is destined to MFFS patients. Under this paradigm, payers and providers should entertain the possibility of negotiating ACO-like terms for physician groups under Medicare Advantage and/or engaging CMS in conversations to create an ACO pathway for local providers.
HEALTH IT – HHS has made available funding for critical IT initiatives including but not limited to Health Information Exchange (HIE), health and human service eligibility and enrollment system functionality, “Medicaid Management Information System” (MMIS) functionality, and – potentially – Health Benefits Exchange (HBE) system functionality. It is fundamental that we take full advantage of these funding opportunities. Moreover, it is of particular importance that we bring together all of these initiatives to where their benefit is maximized.
ACA is an extraordinary opportunity to improve the quality of health in Puerto Rico. Let's take advantage of it.
