Healthcare In Crisis: Healthcare provisions scaled back in stimulus bill

Monday, February 9, 2009

Healthcare provisions scaled back in stimulus bill

The Senate is gearing up to approve an $827 billion economic stimulus bill on Tuesday, following negotiations to trim at least $100 billion from the package.

Under that agreement, negotiated by the White House and Senate moderates, several healthcare provisions that originated from the Senate Finance Committee were scaled back. For example, an agreement was reached to provide a 50% subsidy for 12 months for the purchase of health insurance under COBRA, instead of a two-thirds subsidy, a move that would save at least $5 billion.

Health information technology funding was cut under the agreement, as well. HHS' Office of the National Coordinator will receive $3 billion, reduced from $5 billion in the original proposal, to spend on providers for the adoption of IT and electronic health records.

In addition, lawmakers determined they could save another $2 billion by capping the amount of funds that a critical-access hospital could receive under the health information technology provisions at $1.5 million per hospital.

Both House and Senate versions of the stimulus bill would allot $86.5 billion to increase the federal share of the Medicaid program. Each state's portion of the federal medical assistance percentage, or FMAP, would increase by 7.6 percentage points for two years, starting in fiscal 2009 and running through the first quarter of fiscal 2011. Additional assistance based on unemployment rates would be offered by using a tiered equation, with states eligible for anywhere from a 1.5 percentage point increase up to a 3.5 percentage point increase.

An attempt by Sen. Chuck Grassley (R-Iowa), ranking member on the Senate Finance Committee, to get language approved to redistribute the FMAP funding more evenly among the states, was rejected.

Grassley called the current funding equation unfair, adding that states with low unemployment numbers would see less money.

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Statistics Collection

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