Puerto Rico Medicare Advantage Fairness Act of 2026
- Sponsor
- Rep. Ruiz, Raul [D-CA-25]
- Committees
- Energy and Commerce Committee (primary)
- Last action
- Oct 5, 2026
Bottom line
This bill seeks to increase federal Medicare Advantage payments to Puerto Rico by linking its geographic adjustment factor to that of the U.S. Virgin Islands, potentially boosting healthcare funding and plan offerings on the island.
What it actually does
This bill amends the Social Security Act to mandate that, starting January 1, 2027, the geographic adjustment factor used to determine Medicare Advantage (MA) benchmarks in Puerto Rico will be equal to the adjustment applied to MA payment areas in the United States Virgin Islands. This change aims to increase the federal payments received by MA plans operating in Puerto Rico by aligning their reimbursement rates with a territory that typically receives higher geographic adjustments.
Proponents argue
Supporters argue that Puerto Rico's current Medicare Advantage benchmarks are unfairly low due to an outdated geographic adjustment methodology, leading to underfunded plans and limited access to care for beneficiaries. They contend that aligning Puerto Rico's adjustment with the U.S. Virgin Islands, which faces similar healthcare cost challenges but receives a more favorable adjustment, would provide more equitable funding, stabilize the MA market, and improve healthcare services for its predominantly Medicare-dependent population.
Opponents contend
Opponents might argue that such a change could lead to increased federal spending without a comprehensive review of actual healthcare costs in Puerto Rico versus the U.S. Virgin Islands, potentially creating an artificial benchmark. They may also raise concerns about setting a precedent for other territories or states to seek similar adjustments, leading to broader budgetary implications, or suggest that a more tailored, data-driven approach to geographic adjustments would be more appropriate than a direct linkage.
The bill is exceptionally short and clear, allowing for quick comprehension of its direct impact.
Section 2. Section 1853(c)(1)(D)(i) of the Social Security Act (42 U.S.C. 1395w-23(c)(1)(D)(i))
Geographic Adjustment for Medicare Advantage Benchmarks in Puerto Rico
This provision amends federal law to change how Medicare Advantage (MA) plans are funded in Puerto Rico. Starting in 2027, the geographic adjustment factor used to calculate the per capita cost for MA plans in Puerto Rico will be set to match the factor used for the U.S. Virgin Islands. This means that the federal government will pay MA plans in Puerto Rico based on the same geographic cost assumptions as those in the U.S. Virgin Islands, which typically results in higher payments than Puerto Rico currently receives.
Supporters argue
Supporters argue that this change is crucial for achieving parity and equity for Puerto Rico's Medicare beneficiaries. They contend that the current geographic adjustment severely underpays MA plans in Puerto Rico, leading to a disparity in benefits and provider availability compared to the mainland U.S. and even other territories. By linking to the U.S. Virgin Islands, which has a more favorable adjustment, the bill would provide much-needed financial stability to the MA market in Puerto Rico, allowing plans to offer more comprehensive benefits and better access to care.
Critics contend
Critics might argue that while the intent to improve healthcare in Puerto Rico is laudable, directly linking its geographic adjustment to the U.S. Virgin Islands might not be the most accurate or fiscally responsible approach. They could contend that actual healthcare costs and market dynamics in Puerto Rico might differ significantly from the U.S. Virgin Islands, and a more precise, data-driven methodology should be developed rather than an arbitrary linkage. This could be seen as an inefficient use of federal funds if the adjustment doesn't accurately reflect local costs.
Tradeoffs
The bill balances the desire to provide equitable healthcare funding for Puerto Rico's Medicare beneficiaries with concerns about federal spending and the accuracy of geographic cost adjustments. While it addresses a perceived inequity, it does so by linking to another territory's adjustment rather than establishing a new, independent calculation based solely on Puerto Rico's specific healthcare market costs.