In recent days, Hurricane Fiona has left another path of destruction across Puerto Rico. Over the last decade, Puerto Rico has been subject to a struggling economy, limited health care infrastructure, and legal exceptions for US territories contributing to a significantly underserved population. And though Puerto Rican residents are paying federal taxes, including Medicare payroll taxes, they are entitled to fewer federal benefits offered to mainland US Medicare beneficiaries.

A new study published in JAMA Health Forum compared Medicare Advantage (MA) plan characteristics, financing, and quality in Puerto Rico with those in the US mainland, in addition to changes in their financing and quality in both regions following ACA (Affordable Care Act) implementation. Financing measures included plan payment benchmarks (amounts offered by federal government for insuring average risk beneficiaries), plan bids (plans’ asking prices for a beneficiary of average risk), and plan rebates (an incentive given to the plans by the federal government for bidding below the benchmark).

More than 70% of Medicare beneficiaries in Puerto Rico are enrolled in MA, a privately administered Medicare program with plan payments determined by bidding. Despite accounting for approximately 50% of health care spending in the territory, there has been little evidence on the levels and changes in MA payments in Puerto Rico.

The study, conducted by Associate Professor of Health Care Policy and Medicine, Zirui Song, MD, PhD, with lead author Tom Roberts, MD, MBA, Oncology Fellow at Dana Farber Cancer Institute, used public MA data from Centers for Medicare & Medicaid Services spanning January 2006 through December 2019. They measured risk-standardized federal benchmarks, risk-standardized plan bids, and rebates received by plans, while also assessing risk adjusted benchmarks, risk adjusted bids, actual plan payments, and aggregate plan quality ratings.

Comparative analysis revealed that prior to ACA implementation there were 211 MA plans in Puerto Rico and 13,899 plans in the 50 states and Washington, D.C.; while after ACA, there were 433 MA plans in Puerto Rico and 29,515 in the US mainland. Examining differential changes in plan payments in Puerto Rico and US mainland pre and post ACA, risk-standardized benchmarks were 33% lower for MA plans in Puerto Rico than in the mainland US ($556.73 vs $831.15 per beneficiary per month) before the ACA, with this gap increasing to 38% after ACA implementation. Risk standardized plan bids in Puerto Rico dropped by 3% after the ACA, and rebates decreased by $75.11 in Puerto Rico post ACA; significantly more than the $2.05 decrease in the mainland US.

According to the study, MA plans in Puerto Rico received lower payments than in the US mainland, and this gap widened after ACA implementation. While CMS paid additional quality bonuses to MA plans in Puerto Rico, and they also garnered higher payments through increased coding of beneficiary risk, those offsets only partially closed the gap in MA funding in Puerto Rico.

As Hurricane Fiona challenges Puerto Rico anew—even before it has recovered from Hurricane Maria—its citizens face another humanitarian and health care crisis. The financing of Medicare Advantage is a key policy lever for affecting the care they receive.