Budget Blog

May 14, 2020 - Health Care Issues Update

By Stacey Mazer posted 05-14-2020 02:21 PM


House Releases $3 Trillion HEROES Stimulus Bill: Key Health Provisions

House Democrats introduced a COVID-19 response bill on Tuesday, the HEROES Act, which would authorize more than $3 trillion to assist individuals, businesses and governments. The wide-ranging bill addresses several aspects of pandemic response including economic effects, testing, worker safety, health care coverage, unemployment benefits and food security. Key health provisions in the bill include an increase in the federal medical assistance percentage (FMAP) to total 14 percentage points starting July 1, 2020 through June 30, 2021. This proposed FMAP increase is in conjunction with the Families First Coronavirus Response Act, enacted in March, which increased the FMAP by 6.2 percentage points from January 1, 2020 until the public health emergency ends. The Congressional Budget Office (CBO) assumes that the public health emergency period will go through early 2022, as referenced on page 3 of the preliminary estimate of the CARES Act. The HEROES Act would prevent the Secretary of Health and Human Services (HHS) from finalizing the Medicaid Fiscal Accountability Regulation (MFAR) until the end of the COVID-19 public health emergency, increase federal payments to state Medicaid programs by an additional 10 percentage points starting July 1, 2020 through June 30, 2021 for home- and community-based services (HCBS), and would temporarily increase Medicaid disproportionate share hospital (DSH) allotments by 2.5 percent. A one-page summary of the bill can be found here and a section-by-section summary can be found here. The package highlights House Democratic priorities and is unlikely to be enacted as introduced; Senate Republicans have signaled they will not bring the bill up for a vote in its current form.


HHS Updates Provider Relief Fund Allocations by Provider

The Department of Health and Human Services (HHS) released an updated dataset containing the list of providers that received a payment under the Provider Relief Fund. The dataset includes recipients from the $50 billion general distribution and $10 billion targeted allocation to rural providers who have attested payments and agreed to the Terms and Conditions. The CARES Act and the Paycheck Protection Program and Health Care Enhancement Actprovided $175 billion in relief funds to hospitals and other healthcare providers.


Estimates of Additional Coverage for Medicaid and Marketplaces

The Kaiser Family Foundation estimates 26.8 million people across the country would become uninsured due to loss of job-based health coverage if they do not sign up for other coverage. The analysis estimates that most who lost employer coverage and became uninsured are likely eligible for subsidized coverage, either through Medicaid, estimated at 12.7 million in additional eligibility, or through the Affordable Care Act’s marketplaces, estimated at 8.4 million in additional eligibility. The analysis estimates about 16.8 million people who lost employer coverage will be eligible for Medicaid by January 2021, placing a potential strain on state budgets and provider capacity.


Medicaid Recession-Related FMAP Increases

A report by the Congressional Research Service reviews the federal medical assistance percentage (FMAP) increases that have occurred during recessions and most recently in the Families First Coronavirus Response Actthat added a temporary Medicaid FMAP increase of 6.2 percentage points beginning January 1, 2020, and continuing through the COVID-19 public health emergency period. The report notes that federal fiscal relief to states is provided during recessions through adjustments to the FMAP rate because the process for getting federal Medicaid funding to states is already in place and FMAP increases allow states to prevent further reductions to their Medicaid programs and other portions of their state budgets. Although there are differences, similarities of all three of these recession-related FMAP increases include across-the-board FMAP increases, requirements to maintain Medicaid eligibility standards that are no more restrictive than they were prior to the FMAP increases, and requirements to ensure that states do not increase the percentage that local governments contribute to Medicaid expenditures.


HHS Awards $15 Million to Increase Telehealth

The Department of Health and Human Services (HHS), through the Health Resources and Services Administration (HRSA), awarded $15 million to 159 organizations across five health workforce programs to increase telehealth capabilities in response to the COVID-19 pandemic. These awards are funded through the CARES Act.  HRSA made awards to organizations based on their capacity to implement COVID-19 telehealth activities that train high demand professions across the health care team.