New York – Puerto Rico Governor Pedro Pierluisi welcomed the initial notification from authorities in the United States to evaluate 2025 rates for Medicare Advantage plans that could translate into adjustments in payments for health providers on the island.
On Wednesday, the Centers for Medicare & Medicaid Services (CMS) circulated the initial notice for calendar year 2025 for the Medicare Advantage (MA) and Medicare Part D Drug Plan Programs to update low payment policies these programs, as reported in a press release by the federal Department of Health (DOH).
In the opinion of the island’s president, the action means that we are closer to equality in terms of Medicare funds in Puerto Rico.
Although some 650,000 residents of Puerto Rico, equivalent to 80% of Medicare beneficiaries, are Advantage patients, MA payments on the island are 39% below the average in the United States, and 22% below those assigned to the Virgin Islands.
“The document opens the door for the federal government to formally evaluate our proposal to adjust the payments received by our medical and hospital providers on the Island. We will not rest until we ensure that the Medicare Advantage program in Puerto Rico receives equal treatment and the funds that it needs to guarantee health services to all resident beneficiaries of the Island,” Pierluisi argued in a message on his social networks.
They seek adjustment in Puerto Rico similar to that of the Virgin Islands
Both Democrats in the House of Representatives and leaders of the Government of Puerto Rico seek that the territory be granted the same adjustment by geographic region as the Virgin Islands, which would represent between $1,000 and $1,200 million additional annually for the sector on the island.
The above would be achieved through a modification of the methodology used to calculate the Average Geographic Adjustment (AGA), which is part of the current formula applied on the island.
13 Democrats sent a letter to the Secretary of Health, Xavier Becerra
On January 25, 13 Democrats led by the representative of New York, Nydia Velázquez, sent a letter to the Secretary of Health, Xavier Becerra, to request that the formula be evaluated.
“Unlike the rest of the mainland, the vast majority of older adults in Puerto Rico are beneficiaries of the Medicare Advantage program, compared to the original ‘Fee-for-Service’ (FFS) Medicare. Health care experts have raised concerns about the ability of the current formula to ensure adequate MA payments in Puerto Rico, because it depends primarily on beneficiaries’ per capita spending in the original Medicare FFS. The parameter (“benchmark”) for MA in Puerto Rico or the monthly maximum paid per beneficiary of an MA plan, is 39% below the national average,” the legislators state in the letter.
After learning of the CMS announcement, in a publication on the social network X (formerly Twitter), Velázquez classified the announcement as a vital step in the battle.
“This announcement is a vital step forward, but this fight is not over. Puerto Ricans must make their voices heard so that the health care system gets the funding it deserves. PR is in the middle of a health care crisis, and, we have to do this right!,” she said.
Government increase to MA plans
The statement from the federal Department of Health indicates that the initial notification complements a proposed 2025 rule that CMS released in November 2023 that would strengthen protections for millions of people who depend on MA and Medicare Part D prescriptions.
“The Government’s MA payments to MA plans are expected to increase on average 3.70% or by more than $16 billion between 2024 and 2025, as proposed,” reads the federal authorities’ announcement.
CMS also reported redesigning the Medicare Part D program instructions that will result in reduced drug costs for millions of patients.
As a result of the Inflation Reduction Act, next year, annual out-of-pocket expenses will be capped at $2,000 for Part D beneficiaries.
“Prescription medications should be affordable. Today (Wednesday), we continue taking steps to lower the costs of prescription drugs so that no one has to choose between feeding their families and taking their medicine,” Becerra said in written statements.
Part D drug price negotiations begin
As part of the Government’s efforts, negotiations on Medicare prices for the first 10 medications subject to the Inflation Reduction Law began this Thursday. The goal is to increase the affordability of medications for seniors.
Drugs include: Eliquis, Jardiance, Xarelto, Januvia, Farxiga, Entresto, Enbrel.
Final prices will be revealed on September 1 and will take effect in January 2026.
Andrea Ducas, vice president of health policy at the Center for American Progress (CAP), told El Diario that she is hopeful about the process.
“Today begins a historic first step in the process of negotiating drug prices for Medicare Part D. These negotiations, along with other innovations on the cost of drug prices, from which we already benefit thanks to the Reduction Act Inflation, are critical to promoting health equity and improving prescription drug affordability for older adults. “We are hopeful with the Administration’s (Biden) continued efforts to prioritize people’s access to life-saving medications over pharmaceutical profits,” Ducas said.
In the case of Puerto Rico, inequality in the amount of funding for drugs under Part D continues to be another problem.
Contrary to the states, in Puerto Rico, patients do not have the option of Low Income Subsidy under Part D (LIS).
This program, from which Puerto Ricans are excluded, helps pay drug costs for low-income beneficiaries up to 150% of the FPL (federal poverty level).
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