<<<Back to News Center 2012

Monday, June 18, 2012

Pierluisi Continues His Efforts to Improve Access to Medicare Part B in Puerto Rico

Washington, DC- Resident Commissioner Pedro Pierluisi today thanked the Centers for Medicare and Medicaid Services (CMS) and the U.S. Social Security Administration (SSA) who, at Pierluisi’s urging, recently improved the written materials they make available to Puerto Rico seniors in an effort to better inform them about the seven-month period for enrolling in Medicare Part B and the penalties for late enrollment.

Nevertheless, the Resident Commissioner underscored that the current system continues to be unfair to Puerto Rico because it requires individuals on the Island—unlike in the 50 states and the other territories—to affirmatively opt in to Part B. Pierluisi emphasized that he is continuing to work with Senator Charles Schumer (D-NY) to amend federal law to fix this problem.

Medicare is the federal health insurance program for the elderly and certain individuals with disabilities. Most individuals become eligible to enroll in Medicare Part A, which covers inpatient hospital care, when they turn 65. In every jurisdiction except Puerto Rico, individuals enrolled in Part A are automatically enrolled in Medicare Part B, which covers doctors’ services and outpatient hospital care, and which requires a monthly premium. Individuals can elect to opt out of Part B if they do not want this coverage. In the states, about 94 percent of all Medicare beneficiaries are enrolled in Part B.

In Puerto Rico, by contrast, individuals who are enrolled in Part A are not automatically enrolled in Part B, but rather must opt in to receive Part B coverage. The opt-in process requires individuals in Puerto Rico to take a number of time-consuming steps. Individuals who do not enroll in Part B during a seven-month Initial Enrollment Period, which begins several months before they turn 65 and ends several months after they turn 65, are required to pay a late enrollment penalty. The penalty is significant—a 10 percent increase in the monthly premium for each year that passes once the individual’s Initial Enrollment Period ends—and lasts for as long as that individual receives Medicare.

This system has operated to Puerto Rico’s detriment. There are about 53,000 individuals on the Island who enrolled late in Part B and are therefore paying lifetime penalties. Each year, these individuals—most of whom are elderly individuals of limited means—pay over $7 million in late penalties to the federal government. In addition, Puerto Rico has the lowest Part B enrollment rate in the country, with at least 130,000 individuals on the Island who are enrolled in Part A but not Part B. If and when those individuals do seek to enroll in Part B, they too will be required to pay lifetime late penalties.

The Resident Commissioner has taken action to mitigate this problem administratively and to resolve it once and for all legislatively. In June 2011, he wrote a letter urging the federal government “to implement a plan to better educate Island beneficiaries about the benefits and costs of Part B, especially about the severe lifetime penalty that is imposed for late enrollment.” Because of these efforts, CMS and SSA have revised the materials they make available to Puerto Rico residents to provide more adequate warning about the enrollment period and the steep penalties for late enrollment.

“I appreciate that CMS and SSA have taken these steps to provide better notice about the enrollment period and the consequences of later enrollment in a clear and easily-understandable way. Going forward, I expect this will reduce the number of individuals who enroll late in Part B,” said the Resident Commissioner.

“However, I must also reiterate my dissatisfaction that Puerto Rico is the only jurisdiction in the United States where individuals who are enrolled in Part A have to affirmatively enroll in Part B, when individuals in the states and other territories are automatically enrolled in Part B. This unprincipled disparity has harmed hundreds of thousands of Island residents over the years,” added Pierluisi.

In order to resolve this problem, the Resident Commissioner has introduced legislation that would accomplish three things. First, after a period of time that is sufficient to enable CMS and SSA to make the necessary arrangements, Puerto Rico residents who become eligible for Part A would be automatically enrolled in Part B, just as occurs in every other state and territory. Second, for the 53,000 individuals in Puerto Rico who are already paying the lifetime Part B late enrollment penalty, the bill would reduce their monthly penalty by a significant percentage, so that the penalties are far lower. Third, for the 130,000 individuals in Puerto Rico who are eligible for Part B but not enrolled in Part B, the bill would provide a special enrollment period during which they could enroll on favorable terms. Specifically, if they enroll during the special enrollment period, the monthly late enrollment penalty they would otherwise be subject to would be reduced by a substantial amount.

“In this battle, I have a great ally, Senator Schumer, who understands that the current arrangement has been harmful to the Island’s seniors. We will continue working together and the people of Puerto Rico can feel confident that I will make every effort necessary to resolve this problem,” said Pierluisi.