Medicare Advantage in Puerto Rico

One of the Nation's Highest-Performing Medicare Advantage Programs Requires a Payment System that Better Reflects Puerto Rico's Healthcare Needs

Medicare Advantage is the primary source of health coverage for older adults and individuals with disabilities in Puerto Rico. Today, more than 683,000 beneficiaries, representing approximately 96% enrolled of all Medicare-eligible residents, are enrolled in Medicare Advantage, making Puerto Ricoone of the nation's strongest examples of coordinated, value-based care. Maintaining this successrequires federal payment policies that more accurately reflect Puerto Rico's healthcare needs and support the program’s long-term sustainability.

96%

of Medicare-eligible residents choose Medicare Advantage

Medicare Advantage by the numbers

Medicare Advantage provides comprehensive health coverage through private health plans approved by Medicare. These plans coordinate care, emphasize prevention and chronic disease management, and often offer supplemental benefits that help beneficiaries maintain their health and independence.

In Puerto Rico, Medicare Advantage serves as the backbone of healthcare for older adults and indivuduals with disabilities, helping more than 683,000 beneficiaries access coordinated, highquality care close
to home.

683,000+

Beneficiaries

96%

Medicare Advantage Enrollment

307,000+

Dual-Eligible Special Needs Plan (D-SNP) Beneficiaries

99%

Enrolled in 4.5- or 5-Star Plans

20+ Years

Integrated Medicare-Medicaid D-SNP Model

A Proven Model for Coordinated, Value-Based Care

Quality – Most Medicare Advantage beneficiaries in Puerto Rico are enrolled in 4.5- or 5-Star plans, reflecting strong performance in quality, patient experience, and health outcomes.

Coordinated Care – Health plans work closely with physicians, hospitals, pharmacies, and community basedproviders to coordinate care
and improve health outcomes.

Prevention & Chronic Disease Management – The Medicare Advantage model emphasizes preventive care, early intervention, and ongoing management of chronic conditions to improve health outcomes and quality of life.

Meeting the Needs of Puerto Rico's Aging Population – Puerto Rico has one of the oldest populations in the United States. Medicare Advantage helps beneficiaries manage chronic conditions, coordinate care, and access comprehensive healthcare services across the Island.

A Healthcare Environment Unlike Any Other U.S. Jurisdiction

Medicare Advantage in Puerto Rico operates within a healthcare environment unlike that of any other U.S. jurisdiction.

Puerto Rico has one of the nation's oldest populations, the highest rate of Medicare Advantage enrollment, higher rates of chronic disease and poverty, and limited access to certain federal healthcare programs.

These unique demographic, economic, and healthcare realities should be appropriately reflected

in the federal policies that support Medicare Advantage.

An Older and Higher-Need Population

Puerto Rico's Medicare Advantage program serves one of the nation's oldest and most medically vulnerable populations.

25% of Puerto Rico's population is age 65 or older, compared with 18% nationally.
Nearly 40% of residents live below the Federal Poverty Level, compared with 13% nationally.
17.8% of adults have diabetes, significantly higher than the national rate of 11.6%.

A Different Medicare Landscape

Medicare Advantage is the foundation of Medicare coverage in Puerto Rico.

Approximately 96% of Medicare beneficiaries are enrolled in Medicare Advantage.
Only 1.5% of beneficiaries enroll in stand-alone Medicare Part D prescription drug plans, compared with 36% nationally.
More than 307,000 beneficiaries receive fully integrated Medicare and Medicaid benefits
through Puerto Rico's long-established Dual-Eligible Special Needs Plan (D-SNP) model.

Not a Low-Cost Healthcare Market

Despite common misconceptions, Puerto Rico is not a low-cost healthcare environment.

Residents pay the same Medicare payroll taxes (FICA) as all other U.S. citizens.
The overall cost of living exceeds the U.S. average.
San Juan ranks among the nation's most expensive metropolitan areas.

Filling Critical Federal Program Gaps

Unlike the states, Puerto Rico does not receive the same level of support through several key federal programs, including:

Supplemental Security Income (SSI)
Medicare Savings Programs (MSP)
Long-Term Services and Supports (LTSS)
Part D Low-Income Subsidy (LIS)

As a result, Medicare Advantage plans in Puerto Rico often provide supplemental benefits that help address needs typically supported through these federal programs in the states.

A Different Medicare Advantage Program in Puerto Rico

American citizens who choose to live in Puerto Rico receive $3.400 less monthly benefits than those living in the mainland United States.

The Structural Funding Challenge

Puerto Rico's Medicare Advantage program has demonstrated that high-quality, coordinated, value-based care can improve health outcomes while making efficient use of federal healthcare resources. However, the federal payment methodology is not fully adapted to the unique characteristics of Puerto Rico's healthcare system.

The current Medicare Advantage payment methodology relies heavily on Traditional Medicare (fee-for-service) spending to establish benchmark payments. Because nearly all Medicare beneficiaries in Puerto Rico enroll in Medicare Advantage, the fee-for-service population is exceptionally small, representing 3.5% of beneficiaries. As a result, fee for service spending no longer provides a reliable basis for determining payment rates. Consequently, benchmark payments do not accurately reflect Puerto Rico's healthcare environment or the needs of the population served by the program.

The Impact

Medicare Advantage benchmark payments in Puerto Rico remain approximately 40% below the U.S. average.
Puerto Rico also faces significant funding gaps in Medicaid and other key federal healthcare programs.
These structural disparities place increasing pressure on healthcare providers, limit resources available for innovation and supplemental benefits, and create challenges for the program’s long-term sustainability.

Addressing the structural limitations of the current payment methodology would help align federal policy more closely with Puerto Rico's healthcare realities while strengthening a program that has consistently demonstrated high-quality performance and responsible stewardship of federal healthcare resources.

Why It Matters Beyond Puerto Rico

Puerto Rico has built one of the nation's most successful Medicare Advantage programs despite operating under one of the nation's lowest payment rates. The program has demonstrated that coordinated, value-based care can deliver high-quality outcomes for one of the nation's oldest and most medically vulnerable populations while making efficient use of federal healthcare resources.

Addressing the structural funding challenges facing Puerto Rico's Medicare Advantage program will help preserve access to care, strengthen the healthcare workforce, and support the long-term sustainability of the Island's healthcare system. Without action, continued provider shortages and the migration of Medicare beneficiaries to the mainland could increase federal Medicare spending as beneficiaries transition to jurisdictions with substantially higher healthcare costs.

Strengthening Medicare Advantage in Puerto Rico is not only an investment in the Island's healthcare system, but also an investment in the efficient and responsible use of federal healthcare resources.

Federal Policy Priorities

Strengthening Medicare Advantage Through Sustainable Payment Policy

Puerto Rico’s Medicare Advantage program has consistently demonstrated that coordinated, value-based care can deliver strong outcomes for beneficiaries. However, the current federal payment methodology does not fully reflect Puerto Rico’s healthcare environment and beneficiary population, resulting in payment rates that remain significantly below those in other U.S. jurisdictions.

MMAPA supports targeted administrative and policy solutions to address structural funding disparities while preserving beneficiary access, strengthening healthcare providers, and ensuring the long-term sustainability of Medicare Advantage in Puerto Rico.

Use U.S. Virgin Islands Data as a Benchmark Proxy for Puerto Rico

Administratively adopt U.S. Virgin Islands data as a proxy for Puerto Rico in establishing its Medicare Advantage benchmark, beginning in 2028, because Puerto Rico's traditional (fee-for-service) Medicare population is too small to produce a reliable benchmark on its own. This targeted adjustment would help address longstanding structural payment disparities while maintaining Puerto Rico as one of the lowest-funded Medicare Advantage jurisdictions in the nation.

Strengthen Provider Sustainability

Ensure that Medicare Advantage payment policies support physicians, hospitals, pharmacies, and other healthcare providers so they can continue delivering high-quality, coordinated care to Puerto Rico’s growing Medicare population.

Modernize the Medicare Advantage Payment Methodology

Update the Medicare Advantage payment methodology to better reflect Puerto Rico’s unique healthcare environment, including its exceptionally high Medicare Advantage enrollment, limited Medicare fee-for-service experience, and distinct healthcare delivery system.

Preserve Beneficiary Access

Maintain access to comprehensive, coordinated, value-based care for the more than 683,000 Puerto Ricans who rely on Medicare Advantage as their primary source of health coverage.

Policy Resources

Explore our latest publications and reference materials to learn more about Puerto Rico's Medicaid program, healthcare landscape, and MMAPA's policy priorities.