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P.R. creditor blasts Oversight Board’s ‘unrealistic Fiscal Plan’

The Financial Oversight and Management Board for Puerto Rico has developed its current Fiscal Plan based on unreliable data and assumptions, according to an analysis published on RevitalizePuertoRico.com, a project of Assured Guaranty Ltd., a Puerto Rico creditor.

This in turn will fall short of leading Puerto Rico “toward a more sustainable economic future,” the company stated, adding that the problem is the plan’s flawed federal Medicaid funding projections, which Assured has summarized.

“Federal Medicaid funding has a critical role in providing affordable health care to the people of Puerto Rico, especially as the island works toward a sustainable recovery, and Congress has a record of providing support for the program, averaging 55 percent of Puerto Rico’s total Medicaid spending over the past 11 years,” Assured stated.

“Yet, the Oversight Board’s current Fiscal Plan assumes that federal support of the island’s Medicaid program will drop precipitously,” it noted.

The bond insurer concluded that the Oversight Board’s current Fiscal Plan “illogically assumes that the federal share of Puerto Rico’s Medicaid funding will plunge from 83 percent in fiscal year 2019 to 10 percent in fiscal years 2021-2023.”

“What’s more, the Oversight Board counterintuitively accepted the implausible assumption that as Puerto Rico’s population declines by almost 6 percent from fiscal 2018 to 2023, Medicaid spending will rise 35 percent,” Assured added.

“Flawed and inadequately disclosed Fiscal Plan assumptions stand in the way of Puerto Rico’s ability to achieve fiscal responsibility and regain capital market access — essential steps toward a sustainable recovery and brighter future for Puerto Rico’s residents,” the company concluded.

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