A major precipitating factor of the fiscal crisis in Puerto Rico is Medicaid. Federal law provides that the federal government supply block grants to its territories, including Puerto Rico. Each year the federal block grant funding produces a budget shortfall that Puerto Rico must fund. Puerto Rico's Medicaid budget shortfall has been as large as $1.8 billion. Medicaid underfunding is responsible for a structural budget deficit in Puerto Rico. The severe underfunding of Medicaid has had adverse consequences for Puerto Rico. During the last decade Puerto Rico has had various health crises: Hurricanes Maria and Fiona, the Zika virus, and COVID-19. To further exacerbate matters, during the last decade Puerto Rico has lost 50% of its physicians. As set forth herein, federal funding of Medicaid for Puerto Rico has to be reconstituted because it has created a fiscal and public health disaster.

Puerto Rico's Population Has a High Poverty Rate and Lower Per Capita Income Than Any State; Therefore, Medicaid Is a Vital Program That Provides Essential Public Health Services in Puerto Rico. To understand the importance of the Medicaid program in Puerto Rico one has to understand the demographics and economic conditions in Puerto Rico. In 2019 the poverty rate in Puerto Rico was 43.5%. U.S. Overview of the State – Puerto Rico – 2022, Dep't of Health and Human Services. In 2019 the child poverty rate in Puerto Rico was 56.8%. Id. Puerto Rico's median income for an individual is $26,146. Census Bureau Median Family Income by Family Size. Puerto Rico's median income is lower than Mississippi's by almost 50%. Id. Approximately 50% of Puerto Ricans receive Medicaid. Under these circumstances, Puerto Rico has a strong reliance on the Medicaid program.