Medicare Advantage covers 670,000 older adults
Puerto Rico’s push for more equitable Medicare Advantage funding gained new momentum this week as a bloc of Republican lawmakers urged federal health officials to correct long‑standing payment disparities that have constrained the Island’s healthcare market and shaped investment decisions for years.
In a letter to Health and Human Services (HHS) Secretary Robert F. Kennedy Jr., Rep. Greg Murphy of North Carolina —co‑chair of the House Republican Doctors Caucus— led 14 House Republicans in calling for an administrative adjustment that would raise Puerto Rico’s Medicare Advantage benchmark to at least 70 percent of the Average Geographic Amount (AGA) starting in 2028. That level already applies to the U.S. Virgin Islands, which receive significantly higher MA payments.
For Puerto Rico’s healthcare sector, the proposal represents a potential shift in the financial architecture underpinning the Island’s largest insurance market. Medicare Advantage covers roughly 670,000 older adults —about 96 percent of all Medicare beneficiaries in Puerto Rico— giving it the highest penetration rate in the United States. Yet MA benchmark rates on the Island remain about 41 percent below the national average, a gap that has shaped provider behavior, insurer margins, and capital investment in clinics, technology, and workforce retention.
Governor Jenniffer González Colón framed the congressional letter as evidence that sustained lobbying efforts in Washington are beginning to yield tangible results. “My Administration will continue advancing initiatives to ensure fairer access to health services for the people of Puerto Rico, and those efforts are already producing concrete results,” she said, noting that higher benchmarks would stabilize the Island’s healthcare ecosystem and reduce incentives for physicians to relocate to the states.
Murphy echoed that concern, arguing that chronic underfunding “continues to weaken the Medicare Advantage program in Puerto Rico and in other regions of the nation with disproportionately high enrollment.” Rep. Don Bacon added that correcting the payment formula would help stem the outmigration of both patients and providers, a trend that carries economic consequences beyond the healthcare sector.
The business implications are broad: higher MA benchmarks could improve insurer solvency, expand provider networks, and increase reimbursement rates for hospitals and clinics that have long operated under tighter margins than their mainland counterparts. Analysts have also noted that more competitive MA payments could attract new entrants to Puerto Rico’s insurance market, intensifying competition and potentially improving consumer benefits.
Gabriella Boffelli, executive director of the Puerto Rico Federal Affairs Administration (PRFAA), emphasized that Puerto Rican workers contribute to Medicare under the same federal payroll tax rules as workers in the states. “They deserve a payment system that reflects the current reality of Medicare Advantage, not one based on an outdated methodology,” she said. She argued that modernizing the benchmark would strengthen chronic‑care management, improve patient access, and enhance long‑term program sustainability —all factors that influence healthcare investment decisions.
The congressional push follows CMS’s 2027 Medicare Advantage Rate Notice, which granted Puerto Rico a 4.01 percent increase, outpacing the national average of 2.48 percent. While welcomed by insurers and providers, the adjustment did not resolve the structural formula that has kept Puerto Rico’s rates among the lowest in the nation.
Boffelli credited a coordinated coalition of healthcare providers, patient organizations, private‑sector partners, and the Governor’s Multisectoral Health Working Group for maintaining pressure in Washington. She said the administration remains committed to working with the Trump Administration, Congress, and industry stakeholders to advance reforms that strengthen Medicare Advantage both in Puerto Rico and nationwide.
As MA enrollment continues to rise across the United States, Puerto Rico’s experience is increasingly viewed as a case study in how outdated payment methodologies can distort markets, limit provider capacity, and create long‑term fiscal challenges for insurers and governments alike.
