Manuel stared at the numbers in disbelief.

It was time to renew his health insurance plan. Until then, he had chosen coverage with no pharmacy limit to make sure his treatments and those of his son, a cancer patient, were included.

But when he received First Medical’s updated summary of benefits and costs, he knew his family would have to make the difficult decision to switch to a cheaper plan. The premium for his family health plan — the fixed amount he paid his health insurer each month — was rising by nearly $200 between 2022 and 2023, and he had no way to afford it.

“I needed coverage that gave me greater benefits, but two years ago I had to switch because I couldn’t [pay for it],” said Manuel, a pseudonym used to protect his identity. He has worked as a public employee for the past 26 years. He has not yet exceeded his plan’s pharmacy cap, but he knows that if he does, he will have to find some way to cover his family’s medical expenses.

Manuel is not the only one facing that difficult situation in Puerto Rico. For active public employees, the average monthly premium per insured person — what is paid to the insurer for each covered person — rose 121% between 2016 and 2024, according to data from the Puerto Rico Office of the Insurance Commissioner, known by its Spanish initials as OCS. For public employees, the government pays the employer contribution with public funds. For retired government employees, the picture is worse: The average monthly premium per insured person shot up from $50 in 2016 to $758 in 2024, an increase of more than 1,400%. During that same period, the average monthly premium per insured person rose 95% for people with private individual plans, who pay for their health insurance entirely out of pocket.

Overall, the average monthly premium per insured person — which includes payments from individuals, employers and/or the government through local public funds and federal Medicaid and Medicare funds — doubled over the past decade, from $282 to $563, the Centro de Periodismo Investigativo (CPI) found after analyzing annual financial reports insurers submitted to the OCS. Which funding source, or combination of sources, pays for a health plan depends on each person’s employment and socioeconomic status, age and type of coverage.

Meanwhile, several insurers have reported multimillion-dollar losses over the past decade, though the industry posted average profits of $70.5 million during that period. At the same time, doctors and other health care providers have said the rates they are paid have remained stagnant, which they say contributes to medical office closures and a shortage of specialists.

Puerto Rico’s health insurance system relies on a combination of sources — federal and local public funds and commercial health plans. Unlike the states, Puerto Rico receives Medicaid funding under a capped federal block grant rather than an open-ended matching formula, meaning if federal funds run out, the local government has to fill the gap. Meanwhile, Medicare Advantage, offered by private companies, covers most of the island’s Medicare beneficiaries. For Puerto Ricans with private insurance, premiums are paid by individuals, often with a contribution from their employer, but with fewer options than patients elsewhere, as the island’s insurance market is dominated by just four companies.

The CPI analyzed the past decade of annual financial reports for Puerto Rico’s seven leading health insurers: First Medical, MCS Advantage, MMM Healthcare, MMM Multi Health, Plan de Salud Menonita, Triple-S Advantage and Triple-S Salud. These insurers, which belong to four conglomerates, cover about 75% of people in Puerto Rico. The average premiums per insured person used in the CPI’s analysis, conducted in consultation with public health experts, were calculated by dividing all insurers’ total premium revenue — including revenue from the public plan, Medicare Advantage and private plans — by the number of people covered each month.

The CPI requested interviews with all the insurers it examined, but only Triple-S and Plan de Salud Menonita agreed. MCS told the CPI it does not grant interviews about the company’s finances, despite receiving $4.7 billion in public funds from the Medicare program. First Medical and MMM said they would not grant interviews.

Triple-S and Plan de Salud Menonita said in separate interviews that their premium increases are based on actuarial studies, financial analyses used to assess economic risk. They also said factors such as plan use and rising drug costs drive increases. As of publication, the OCS had not answered the CPI’s questions about its role in the premium increase process.

Health Secretary Víctor Ramos Otero said health insurers must submit actuarial studies to the OCS justifying premium increases for commercial private plans. For Medicare Advantage plans, he said, actuarial studies are submitted to the Centers for Medicare & Medicaid Services, or CMS, for premium approval. In the case of Vital, Puerto Rico’s Medicaid-funded government health plan, coverage is fixed for the duration of the contract. As a result, the actuarial study the Puerto Rico Health Insurance Administration, known by its Spanish initials as ASES, requests to negotiate premium increases is limited to each insurer’s spending pattern. Vital premiums almost always increase, Ramos Otero said, because medical spending trends “have increased dramatically,” especially in pharmacy costs.

Drug costs rise by about 3% to 4% each year, said Linda Ayala Bousson, executive director of the Puerto Rico Community Pharmacy Association. This year, however, the increase is about 5%.

For patients who pay part of their health plan out of pocket, premium increases represent a greater financial burden and may reduce their use of medical services, according to experts interviewed by the CPI. According to OCS data, the average monthly premium per insured person for a private individual plan increased from $85 to $166 between 2016 and 2024.

“If you’re paying it directly out of your own pocket, or you and your employer are paying it together, the immediate effect is that it reduces the income you have left over for other things,” said Heriberto Marín Centeno, an economist and professor at the University of Puerto Rico’s Medical Sciences Campus. “Eventually, those increases will mean that some people may not be able to pay for health insurance, or that some people will have to stop paying for a service,” he added.

According to the U.S. Census Bureau’s American Community Survey, in 2024, an estimated 178,000 or more people in Puerto Rico had no health coverage. Another survey, by the Centers for Disease Control and Prevention, found that 9.8% of the adult population needed to see a doctor at some point that year but could not afford it. Puerto Rico’s total population is around 3.2 million people.

Copays Rise and Benefits Shrink

Iván Colón Pérez, a health services consultant, said private plans have opted to increase copays to offset rising health care costs for these companies. If chemotherapy costs $30,000, a 30% copay would mean the patient has to pay $9,000 for the treatment, Colón Pérez said by way of example.

The premium is what the insured person, and sometimes the employer, pays each month for a health plan. A copay is the additional amount an insured patient pays for a specific medical service, while a deductible is the amount the beneficiary must pay before insurance starts paying. In other words, a $100 deductible means the plan will not pay until the beneficiary has spent that amount on covered services. By contrast, a $20 copay to see a specialist means the insured person must pay that amount per visit to receive the service, with the plan covering the rest.

“As premiums have increased, employers have become more reluctant to pay. Because, of course, it can’t go on indefinitely; their pockets aren’t bottomless,” Colón Pérez said. “But insurers have told employers: ‘Look, I can limit the premium increase to just 5% or 10%, but we have to increase copays or put a limit on coverage,’” he added.

Marín Centeno said increasing copays is a strategy meant to keep premiums relatively stable for those who pay them, but it requires patients to absorb more costs directly because their out-of-pocket expenses increase.

“That strategy also has a cost, apart from the cost, obviously, in dollars and cents. As you become willing to sacrifice money from your own pocket to pay more in deductibles and copays, that begins to raise barriers to accessing services,” the economist said.

Manuel, the public employee, said the increase in his health insurance premium has not come with greater benefits. Instead, the opposite has happened: He now pays higher copays, too.

In 2024, Manuel said, his family had to pay nearly $1,000 in copays for a positron emission tomography scan, or PET scan, for his 22-year-old son, who was diagnosed with cancer eight years ago and is now in remission.

Manuel, who has migraines, now pays about $30 for a medication that previously did not require that payment. That medicine is in addition to others he must take to control cholesterol and high blood pressure. In all, he pays about $60 a month for his treatments.

As a cost-cutting measure, he said, he sometimes alternates the medications he buys each month. For example, if he buys the treatment for hypertension and cholesterol one month, the next month he buys only one of them.

“You have to do whatever it takes,” said Manuel, who has an upcoming appointment with a neurologist that will cost him $200 because the specialist does not accept health insurance.

Employees and Pensioners Under Pressure

Joaquín Pérez Cruz, president of the Puerto Rico Government Pensioners Association, said the situation is critical for retirees who do not qualify for Medicare — the federal program that provides coverage for people 65 and older — and do not receive an employer contribution for their health coverage.

Retired police officers who did not pay into Social Security, for example, would not qualify for Medicare coverage, while government employees who retired after 2013 do not receive a government employer contribution for their health plans. In those cases, retirees must take money from their pensions to pay for a health plan, Pérez Cruz said.

“Pensioners have told me they cannot continue treatment because the money they receive is not enough to cover the deductible for that treatment. That is the crisis pensioners are facing,” Pérez Cruz said.

Among active public employees, those with family or couple plans have been hit hardest by rising premium costs, according to Jessica Martínez Santos, president of Servidores Públicos Unidos de Puerto Rico, or SPUPR, a union representing public workers. As much as half of these employees’ biweekly paychecks can go toward health coverage, she said.

“The strongest effect is seen in family plans and couple plans, and we are paying more for less coverage,” said Martínez Santos, whose union represents about 10,000 public employees.

According to data from the Puerto Rico Health Insurance Administration, the premium for a family health plan under the Government Employees Benefits Act, Act 95 of 1963, ranges from $473 to $2,773 a month, while a couple’s plan can cost from $383 to $2,205 a month. The four insurers contracted to provide health coverage under this law — First Medical Health Plan, Auxilio Salud Plus, Plan de Salud Menonita and PROSSAM — cover about 125,000 public employees. First Medical has the highest premiums for individual, couple and family coverage under the law. Patients, however, face problems accessing doctors, especially specialists, who have stopped accepting the plan because of nonpayment, according to a previous CPI investigation.

In the case of SPUPR, Martínez Santos said, the union can negotiate directly with insurers. In August 2025, the union’s membership voted to choose First Medical as its sole health plan. For example, the monthly premium for a family plan covering four people with that insurer can reach $807, while the employer contribution is about $170, Martínez Santos said.

Faced with rising medical costs, Manuel and his wife have considered switching to the Plan Vital, but their income makes them ineligible. The family’s only option, he said, is to stay with the health plan negotiated by SPUPR. Otherwise, they would be left without health insurance coverage.

People With Catastrophic Illnesses Migrate to Vital

Many public employees with catastrophic illnesses such as cancer choose to move to the Plan Vital so they can cover costly treatments, Martínez Santos said. “Through our broker, we help them move to [Plan Vital] so the process isn’t so tedious,” she said, using the common name for Puerto Rico’s government health plan.

ASES Executive Director Carlos Santiago Rosario acknowledged at a public hearing last April that, due to limitations in private health plan coverage, beneficiaries have had to enroll in the Plan Vital to access services and treatments.

“It is a fact that commercial plans are limiting their health coverage in such a way that people are left without coverage and have to turn to the Plan Vital to obtain costly services and treatments their plans do not cover,” Santiago Rosario told the Senate Health Committee.

“The design of health coverage in commercial plans, although they have mandatory coverage requirements, never compares with Plan Vital coverage, so it becomes the only treatment alternative for many patients,” the executive director added.

Ricardo Hernández Rivera, chief executive officer of the Menonita Health System, also acknowledged that Plan Vital coverage is better than private plan coverage. Plan Vital’s annual budget is around $5,000 billion for more than 1.2 million beneficiaries.

“Unless you have a health plan with a series of special coverages, and employers typically do not pay for those special coverages, commercial health plans today cover fewer benefits than Vital covers,” he said.

For example, some patients with inflammatory bowel diseases have had to turn to the Plan Vital, even though they have private health insurance, to cover costly medications, said Esther Torres, president of the Esther A. Torres Foundation for Inflammatory Bowel Diseases. Biologic medications can cost up to $23,000 per dose, she said.

The migration of people with private plans to the Plan Vital increases costs for the government health insurance program without necessarily increasing the Medicaid funds Congress allocates to subsidize it, Torres said. “That worsens the system because it is adding more cost to the Medicaid system,” said Torres, who noted that the complexity of health insurance and the lack of knowledge about how to choose coverage are significant barriers to accessing services.

The health secretary agreed that limits on health plan services are “significantly affecting Vital.”

“When someone is seriously ill, they send them to [Vital],” he said.

He explained that people can qualify for the Plan Vital in several ways, including by income level or based on the patient’s medical expenses.

Ramos Otero said a 2021 CMS audit flagged the way ASES was qualifying patients based on medical expenses. According to the official, ASES was calculating whether a patient qualified based on the cost of the medication, not what the patient actually paid. He said that is being corrected.

Some patients also have to turn to the Department of Health’s Catastrophic Fund because their health plans do not cover the treatments they need. Ramos Otero said the fund “covers specific things” that “are the most expensive,” such as transplants. However, a CPI investigation found that it approves other types of treatments, including “rehabilitation therapies,” “speech therapies” and “cochlear implants,” electronic devices that improve, but do not cure, hearing problems. According to the investigation, the fund has operated irregularly for at least a decade and has approved more than $200 million in grants over the past 10 years arbitrarily and without uniform criteria. It has also recorded deficits and failed to pay providers, who have refused to accept other patients for that reason.

The health secretary said there are costly therapies, such as gene therapies, that the Catastrophic Fund sometimes must cover because most private plans do not.

The Fiscal Health of Insurers

Insurance Commissioner Suzette del Valle Lecároz said in written statements to the CPI that she has identified “several entities” under the agency’s direct monthly supervision, but she did not specify which insurers her office is monitoring.

“The fiscal health of health insurers in Puerto Rico faces significant challenges,” said Del Valle Lecároz, who cited the sustained increase in drug costs and the impact of inflation on operating and medical expenses among those “significant challenges.”

For some experts interviewed by the CPI, the losses reported by insurers in recent years paint a bleak picture. Others, however, argue that the industry is more profitable than the profit-and-loss metrics in financial reports suggest. Since 2018, for example, insurers have spent more than $50 million annually on marketing, peaking at about $78 million in 2020, according to Sergio Rivera Rodríguez, a health policy scholar and university professor.

In an analysis prepared for the Puerto Rico Association of Insurance Companies (known as ACODESE, in Spanish), economist Vicente Feliciano concluded that, given the steady rise in health care costs and demand for services, individuals, employers or the government will have to pay more for health insurance. An alternative to paying more would be to control utilization — in other words, reduce coverage — which the CPI found is already happening.

According to OCS annual reports, 2020 was the health insurance industry’s most profitable year of the past decade, with $256 million in profits, while 2023 was the only year in which the industry posted losses, totaling $551 million.

The 2020 profit peak coincided with the start of the COVID-19 pandemic, when patients postponed procedures and doctor visits, reducing insurers’ expenses, according to Feliciano. The 2023 losses were due in part to increased use of services by patients who had postponed procedures during the pandemic and whose preexisting health problems worsened, he wrote in his report.

Meanwhile, an analysis by Marín Centeno argues that the narrative that the industry is not very profitable is misleading because it focuses only on profit margins and does not consider other indicators, such as return on equity, or ROE, and return on risk-management spending. ROE measures the earnings a company generates with shareholders’ money, while return on risk-management spending measures the profit from an investment while considering the level of risk assumed to obtain it. In his analysis, the economist concluded that profitability margins are up to 11 times higher than what the health insurance industry officially reports.

“They [the insurance companies] are really minimizing what they earn because it benefits them from the standpoint of mass messaging to the public and to politicians,” Marín Centeno said. “It benefits insurers to say they really don’t earn much, that they earn very little, that they are in a fragile, vulnerable situation — that, in other words, people should feel sorry for them instead of being tough on them,” he added.

In recent years, Puerto Rico’s health insurance industry has been marked by significant changes, from companies exiting the market to acquisitions of local insurers by U.S. companies. In February, First Medical laid off dozens of employees as part of “an institutional reorganization process.”

On Jan. 1, Humana stopped offering Medicare Advantage plans in Puerto Rico, leaving the territory’s growing population of older adults and young people with disabilities with fewer coverage options. Humana’s exit from the Medicare Advantage market came about three years after the company announced it would stop offering group health coverage, a decision that affected about 50,000 insured people.

Meanwhile, insurers such as Triple-S, MMM and MCS have come under the control of U.S. companies. In 2021, Indiana-based Anthem completed its acquisition of MMM Holdings. In early 2022, MHH Healthcare, a company owned by New York-based Kinderhook Industries, bought MCS, and Florida-based GuideWell completed its acquisition that same year of Triple-S Management Corp., the parent company of Triple-S Salud and Triple-S Advantage.

For Colón Pérez, the health services consultant, the acquisitions of local insurers would not have happened if the companies were in poor financial condition. He said insurers such as MMM were sold “for billions, and now it turns out that, two years later, they have losses of hundreds of millions of dollars.” With more than 275,000 Medicare Advantage members and more than 314,000 Medicaid beneficiaries, MMM is the ninth-largest Advantage plan in the United States and the second-largest Medicaid plan in Puerto Rico.

“Puerto Rico’s insurers are for-profit businesses whose owners have a responsibility to their shareholders. And what is the primary responsibility of a company with shareholders? To maximize shareholder value; that is why they exist,” Colón Pérez said.

Both Marín Centeno and accountant and consultant Julio A. Galíndez, who has worked in the health sector for 30 years, highlighted in separate interviews the difficulties caused by the market’s high concentration among four companies, which leaves patients and providers with few options and forces providers to accept the rates imposed on them.

Market concentration “takes power away from the patient,” Rivera Rodríguez said, and “makes it easier for them to deny more treatments.”

In practice, Galíndez argued, insurers also decide who can practice medicine in Puerto Rico because they control the credentialing processes that determine entry into their service networks and contracting.

Credentialing is the process through which doctors and providers submit documentation to become providers under a health plan.

“Rates Have Been Frozen for 20 Years”

According to Dr. Sissi Michelle Barreto Sosa, president of the Health Plans Committee of the Puerto Rico College of Physicians and Surgeons, doctors’ rates have been frozen for almost 20 years, forcing some physicians to hold more than one job.

Barreto Sosa said problems with insurers include payment delays, prescription denials and reduced benefits for insured patients.

“The struggle, the day-to-day exhaustion doctors face when they prescribe a medication, write the clinical justification to support it, and two or three times the prescription is denied, sent back, and they are given a similar medication but not the one indicated for the condition,” the family physician and geriatrician lamented.

Barreto Sosa said most requests the committee receives are related to unilateral contract terminations. “Usually, when these terminations happen, they involve doctors whom the plans determine have excessive spending,” she said.

The professor at the UPR Medical Sciences Campus also said problems with insurers have led some doctors, particularly specialists, to stop accepting health plans, making it harder for patients to access services.

“We understand that we have to answer to fiduciary administrative expenses, but the purpose of any health insurance is the patient’s well-being, not thinking of health as an industry or a business. Without patients, there is no health system. Without doctors, there is no health system,” she said.

A 2025 report prepared by Rivera Rodríguez for the Puerto Rico College of Physicians and Surgeons found that, among 291 doctors surveyed, 82% identified problems with insurers as the main reason they would leave Puerto Rico.

“A very important factor is the obstacles health insurance companies place in the way of approving medications for their patients,” Rivera Rodríguez said. “The doctor is the one who studied this; the doctor is the one who knows which medications work because of the patient’s conditions, and obviously, the doctor gets frustrated when an insurer says: ‘No, that is not what the patient needs,’” he added.

Like the situation doctors face, Puerto Rico Clinical Laboratories Association President Felipe Cintrón Zayas said the sector has faced nearly two decades of unilateral rate reductions by health insurers.

“The problem with all this is that the health plan is supposed to sit down with the provider to negotiate an agreement; we are business partners. But the reality is that this has been like a unilateral imposition. ‘This is what I’m going to pay you. Like it or not? If not, I simply take the plan’s coverage away from you, and my patients won’t go there,’” Cintrón Zayas said.

“Sometimes I question what the health plan’s function is, whether it is to manage funds or to engage in unfair competition. Because we have also seen cases where they set up clinics that compete with us, and they place them extremely close to health providers, while requiring you to charge that patient a deductible [or copay], but telling the patient: ‘If you go to our clinics, we charge you zero (for lab tests),’” he said.

“Insurers reached a point where what they are really doing is engaging in unfair competition to eventually kill the patient’s access [to get lab work done at the laboratories of their choice],” Cintrón Zayas added.

“We have never received an increase [in rates] in these past 20 years. Never,” he reiterated, predicting that if the situation continues, there will come a time when, as in some states, they accept only cash.

In fact, the Puerto Rico Clinical Laboratories Association sued Triple-S in December 2025 for unilaterally reducing rates agreed to in laboratory service provider contracts. The case remains active in Puerto Rico courts.

Regarding the litigation, attorney Frances Cifuentes, legal vice president of Triple-S, told the CPI that the insurer adopted the most recent Medicare laboratory fee schedule published by CMS.

“The updated fee schedule includes new diagnostic tests and reflects adjustments to rates for existing tests whose processing costs have decreased because of technological advances,” Cifuentes said in written statements.

The health secretary said the last comprehensive review of rates in the commercial health insurance sector was in 1993 — in other words, a process to “look at the system and adjust them all.” Since then, he said, there have only been some individual negotiations.

Meanwhile, patients pay more each year for fewer services and less access to doctors. For Rivera Rodríguez, the root of the problem lies in the way Puerto Rico’s health system is structured and how it prioritizes profit over patients’ well-being.

Before the 1990s, Puerto Rico had a public health system in which the government directly provided medical and hospital services by region. That changed with the so-called Health Reform, promoted by former Gov. Pedro Rosselló González, which privatized services by contracting with private insurers.

Galíndez said a multisectoral analysis is needed to achieve a system “in which we can all equitably” share the same responsibilities, risks and compensation.

“I think there should be a discussion in which all sectors are represented, and all the books are opened. Let’s really see what we are spending the money on,” Galíndez said.

An analysis presented in 2025 by Estudios Técnicos Inc. and Galíndez LLC found that public and private economic resources for the health sector increased from about $8.5 billion in 2011 to $17 billion in 2024, even as the population declined from 3.7 million to 3.2 million.

“We have to ask ourselves how the money, those $17 billion, is being spent, because somewhere there is leakage, somewhere there is a leak and unfortunately it does not end up where it should, which is in patient care,” Galíndez said.

Journalist Amanda Pérez Pintado is a Report for America corps member.

This translation was generated with the assistance of AI and reviewed by our editorial team to ensure accuracy and clarity.