Puerto rico government

The glaring health equity gap in Democrats’ drug pricing plan

OASHINGTON — As Democrats inch closer to the biggest overhaul of Medicare’s prescription drug coverage in 20 years, they’re ignoring a glaring health equity issue: unequal treatment for low-income adults in 65 and older in Puerto Rico.

Residents of Puerto Rico pay the same Medicare taxes as other Americans, but they get less help than other older adults when it comes to paying their pharmacy drug premiums and drug costs on arrangement. For all the talk Democrats have about health equity during this Congress, they haven’t incorporated a bill that would level the playing field.

Currently, only adults 65 and older earning less than 85% of the federal poverty level, or $11,552 per year, are eligible for additional assistance in Puerto Rico. If the same patient lived in a state like Florida, they would qualify even if they were up to 150% of the poverty line, or $20,385. A group representing insurers in the territory estimates that approximately between 120,000 and 150,000 people currently fall into this subsidy gap.


“There is a human side. Is the health of a grandmother in Florida, Alaska, Texas or Tennessee worth more than in Puerto Rico? Morally, the answer is no,” said George Laws García, executive director of the Puerto Rico State Council.

Residents of Puerto Rico are US citizens, but they may be treated unequally under many federal programs because they live in a territory instead of a state. The legal authority of Congress to enact policies that discriminate against residents of the territories comes from a set of Supreme Court decisions that are based on racist stereotypes, but persist as the law of the land today. Insular affairs, as they are called, establish a legal framework under which the Constitution does not fully apply to residents of US territories. The first cases were decided in 1901.


A case ruled that residents of Puerto Rico were not entitled to the full rights of U.S. citizens in part because citizens of the territories are “foreign races, differing from us in religion, customs, laws, methods of taxation, and modes of thought.”

Residents of Puerto Rico continue to struggle for equal federal benefits. In a case earlier this year, Jose Luis Vaello-Madero sued the government because his federal disability benefits were cut when he moved from New York to Puerto Rico. The Supreme Court resoundingly ruled against him in an 8-1 decision, but conservative Justice Neil Gorsuch indicated there could be an opening to overturn island cases in the future.

“Island affairs have no basis in the Constitution and are instead based on racial stereotypes. They deserve no place in our law,” he wrote in a concurring opinion.

DDemocratic lawmakers have repeatedly introduced legislation, beginning in 2014, to address the prescription drug subsidy gap in Puerto Rico. The latest version is led by Sen. Bob Menendez (DN.J.).

The added benefits could make a big difference for those who qualify. Subsidies help seniors pay monthly premiums, meet annual deductibles, and cover out-of-pocket expenses when picking up medications at the pharmacy counter.

Social Security Administration estimates the added benefits are worth about $5,100 per year. This is not a definitive number for every patient, as some people with higher incomes may receive partial assistance. This year, patients who received full subsidies paid no more than $3.95 for a generic drug or $8.85 for any brand name drug.

Currently, adults 65 or older in Puerto Rico who have an income below 85% of the federal poverty level receive subsidies to help pay for their prescription drugs, but that’s not equal to the level that state residents receive, said Roberto Pando Cintron, president of the Association of Medicaid and Medicare Advantage Products of Puerto Rico. About 120,000 and 150,000 low-income beneficiaries in Puerto Rico who currently receive no assistance could benefit if residents of the territory received equal subsidies, he said.

Despite pleas from advocates, the policy should be ignored at the most critical time for Medicare prescription drug coverage in two decades.

Menendez thinks the Democrats’ domestic spending agenda isn’t perfect, a spokesman said, but he acknowledges he is investing to lower drug prices, expand insurance subsidies and fight climate change.

“He will continue to be a champion for Americans in Puerto Rico, whether in Medicare, Medicaid or other areas,” the spokesperson said.

If Congress succeeds in completely overhauling the Medicare Part D program, which it looks set to do soon, it may not return to reforming the program for a long time.

The broader drug pricing reform includes elements that would no doubt also benefit residents of the territories, such as a $2,000 annual cap on out-of-pocket costs, a negotiation mechanism that could lower the costs of certain high-cost drugs, and penalties for drug makers who rapidly raise prices.

However, this does not address the issue of fairness and leaves the status quo in place for residents of the territories who work with limited resources and try to afford their medications.

Puerto Rico is a huge blind spot in these political debates,” García said.

JThe Supreme Court’s authorization to treat residents of Puerto Rico and other territories differently under federal programs has also fundamentally shaped the territory’s residents’ access to health care.

Puerto Rico receives less Medicaid funding than if it were a state, because Congress maintains unfair payment formulas. And unlike the states, Puerto Rico’s Medicaid funding is also capped. Medicaid funding for the territory will drop starting Dec. 13 unless Congress steps in.

This means it is difficult for doctors and hospitals to plan ahead and invest in their facilities. Uncertainty over funding also makes it difficult to recruit and retain doctors, and the government has fewer funds to improve patient benefits.

And it’s not just people born and raised in Puerto Rico who have fewer health care benefits. A US citizen could live, for example, in New Jersey for most of their life and pay taxes to Medicare, but that person’s federal benefits would be reduced if they decided to retire in Puerto Rico.

“This different treatment leads to health disparities that are tangible. They have become a permanent and discriminatory treatment,” said Jaime Torres, president of Latinos for Health Care Equity.