The glaring health equity gap in Democrats’ drug pricing plan

The glaring health equity gap in Democrats’ drug pricing plan

WASHINGTON — As Democrats approach the biggest overhaul of the Medicare prescription drug benefit in 20 years, they are ignoring a glaring health equity issue: unequal treatment for low-income adults 65 and older in Puerto Rico.

Puerto Ricans pay the same Medicare taxes as other Americans, but are eligible for less help than other older adults in paying their pharmacy drug premiums and prescription drug costs. For all the Democrats’ talk of health equity in this Congress, they haven’t put together a bill that would level the playing field.

Right now, only adults 65 and older who make less than 85% of the federal poverty level, or $11,552 a year, are eligible for extra help in Puerto Rico. If the same patient lived in a state like Florida, they would qualify even if they made 150% of the poverty level, or $20,385. A group representing insurers in the region estimates that about 120,000 to 150,000 people fall into that subsidy gap now.


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

Puerto Ricans 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 for Congress to enact policies that discriminate against regional residents comes from a set of Supreme Court decisions based on racial stereotypes, but remains the law of the land today. The Insular Cases, as they are known, set a legal framework that says the Constitution does not fully apply to residents of US territories. The first cases were decided in 1901.


One case argued that Puerto Ricans were not entitled to full rights as US citizens, in part because the citizens of the territories are “alien races, differing from us in religion, customs, laws, methods of taxation, and ways of thinking”.

Residents in Puerto Rico continue to fight to receive equal federal benefits. In one case earlier this year, Jose Luis Vaello-Madero sued the government because he was stripped of his federal disability benefits when he moved from New York to Puerto Rico. The Supreme Court ruled emphatically against him in an 8-1 decision, but conservative Justice Neil Gorsuch indicated that there may be an opening to overturning the Insular Cases in the future.

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

HeyDemocratic lawmakers have introduced legislation time and time again, starting in 2014, to fix the loophole in Puerto Rico’s prescription drug subsidies. The latest edition is led by Sen. Bob Menendez (DN.J.).

The extra benefits could make a big difference for people who qualify. Subsidies help seniors pay monthly premiums, cover their annual deductibles and pay out-of-pocket costs when they pick up their medications at the pharmacy counter.

The Social Security Administration estimates that the additional benefits are worth about $5,100 a year. This is not a definitive number for every patient, as some people with higher income levels can get partial help. 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 and older in Puerto Rico who have an income below 85% of the federal poverty level receive some subsidies to help with the cost of their prescription drugs, but it is not equal to the level state residents receive , said Roberto Pando Cintron. president of the Puerto Rico Medicaid and Medicare Advantage Products Association; About 120,000 to 150,000 low-income beneficiaries in Puerto Rico who receive no assistance now could benefit if local residents received equal subsidies, he said.

Despite advocates’ pleas, the policy is set to be ignored at the most critical juncture for the Medicare prescription drug benefit in two decades.

Menendez believes the Democrats’ domestic spending package isn’t perfect, a spokesman said, but acknowledges that it is making investments to lower drug prices, expand insurance subsidies and address climate change.

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

If Congress succeeds in completely redesigning the Medicare Part D program, which it seems likely to do soon, it is likely that it will not return to reforming the program for a long time.

The broader drug pricing reform includes elements that would undoubtedly benefit regional residents as well, such as a $2,000 annual cap on out-of-pocket costs, a bargaining mechanism that could lower costs for some expensive drugs, and penalties for drug manufacturers that quickly raise prices.

However, it does not address the issue of equity and leaves the status quo in place for residents of areas working with limited resources trying to afford their medications.

“Puerto Rico is a huge blind spot in these policy discussions,” Garcia said.

TThe Supreme Court’s authorization of differential treatment of Puerto Ricans and other territories under federal programs has also fundamentally shaped local residents’ access to health care.

Puerto Rico receives less Medicaid funding than it would if it were a state because Congress maintains unequal payment formulas. And unlike the states, Puerto Rico’s Medicaid funding is also limited. Medicaid funding for the region will plummet 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 about funding also makes it difficult to recruit and retain doctors, and the government has less funding to improve patient care.

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

“This differential treatment leads to tangible health inequalities. They have become permanent, discriminatory treatment,” said Jaime Torres, president of Latinos for Healthcare Equity.

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