Stimulus Package Healthcare

By: EconomyWatch Content   Date: 17 February 2010

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Ever since President Obama launched his campaign in February 2007, he has supported the cause of stressing reforms in the American healthcare system. Although his goal did not get the thumps up from many members of Congress and social and economic analysts, he signed the American Recovery and Reinvestment Act of 2009, popularly called the Stimulus Package, worth $789.5 billion. Of this, $59 billion was sanctioned towards healthcare reforms as an initial ‘down payment.’

The goal of the stimulus package is to create two million jobs in the US and to achieve 3.8% growth in the GDP. Apart from healthcare, the package also targets other sections including Relief for Families, Education Improvement, Federal Infrastructure, Alternative Energy Production, Science Research and Technology Investments and Aid to Small Business.

Stimulus Package Healthcare: Key Provisions

Initially, there were several debatable healthcare provisions in the House and Senate versions of the bill. The following were considered final later on:

COBRA: Unemployed individuals eligible for COBRA (Consolidated Omnibus Budget Reconciliation Act) benefits were entitled to enjoy federal subsidies for health insurance. The bill was slated to cover the cost of premiums up to about 60%, providing $24.7 billion for nine months for employees laid off till Dec 31, 2009. These provisions “will help workers who lose their jobs retain health insurance and allow states to sustain their Medicaid programs” stated Billy Tauzin, President of PhRMA.

Medicaid Recipients: The bill provided $87 billion for state Medicaid recipients. It was aimed to distribute 65% of the additional federal funds and the remaining $30.45 billion funding had been aimed to be distributed on the basis of unemployment growth rates.

Medicaid programs: The bill sanctioned funding of $10 billion for the National Institutes of Health for biomedical research and construction of required facilities. The research included areas such as stem cells, heart disease, cancer and Alzheimer’s.

Modernization: The Act requires healthcare providers to adopt technological reforms by 2014. The bill also sanctioned $19 billion for the cause. Bonuses of up to $64,000 for physicians and funding of $11 million to enable hospitals to implement an electronic health records (EHRS) system has been provided by the bill. Providers failing to implement EHRS will have to face penalties.

These provisions regarding state Medicaid programs and COBRA were highly favored by groups, including Families USA, AARP, PhRMA, Association of American Medical Colleges, the New America Foundation, American Medical Association, American Hospital Association and America’s Health Insurance Plans.


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