Friday, January 16, 2009
House Recovery Package: Something Old and Something New
On Thursday the House Appropriations Committee and Ways and Means Committee gave us our first look at the much talked about federal recovery package. The American Recovery and Reinvestment Act of 2009 totals $825 billion in spending and tax cuts designed to bring the country out of the recession. A great deal of focus is placed on job creation and energy issues. The bill also provides billions of dollars for programs helping people hardest hit by the economic downturn. It includes traditional stimulus spending and some measures not tried in last year’s stimulus package.
Among the strategies we have seen successfully before are those programs that quickly put money back into the economy. To address rising energy costs, the bill includes $1 billion for LIHEAP (Low-Income Home Energy Assistance Program). Supplemental nutrition assistance is increased by $20 billion, and time restrictions on how long participants can be on the food stamp program are lifted. The current extension of unemployment insurance will be further stretched through December 31, 2009. In addition, the benefit itself will be raised by $25 a week during the same time period.
Some of the boldest measures come in the field of health care. In addition to a 4.8 percent increase in the federal Medicaid contribution and further relief for high unemployment states, the bill includes measures explicitly and implicitly designed to bring the country closer to universal health care.
The act contains $600 million in training dollars for primary care providers “to address the shortages and prepare our country for universal health care.” Funds will support training for doctors, dentists, nurses, and medical students who commit to work in underserved communities.
To stretch health care coverage the bill makes some significant changes to the COBRA program for unemployed workers 55and older and those who have been steadily employed for 10 years. These people will be able to “retain their COBRA coverage until they become Medicare eligible or secure coverage through a subsequent employer.” The COBRA adjustments also provide a 65 percent subsidy for the first 12 months to those who lost their jobs on or after September 1, 2008.
For those who are not voluntarily unemployed and live at 200 percent of the federal poverty level (or a level set by the State), states have the option of adding them and their dependents to the Medicaid rolls. Eligibility is also extended to people receiving food stamps.
These are ambitious measures that could go a long way to relieving the pressure of health care costs for many Americans. It is important to remember, however, that the American Recovery and Reinvestment Act is only two-year legislation intended to bring the country out of the current recession. It is by no means clear that these changes would become permanent.
Among the strategies we have seen successfully before are those programs that quickly put money back into the economy. To address rising energy costs, the bill includes $1 billion for LIHEAP (Low-Income Home Energy Assistance Program). Supplemental nutrition assistance is increased by $20 billion, and time restrictions on how long participants can be on the food stamp program are lifted. The current extension of unemployment insurance will be further stretched through December 31, 2009. In addition, the benefit itself will be raised by $25 a week during the same time period.
Some of the boldest measures come in the field of health care. In addition to a 4.8 percent increase in the federal Medicaid contribution and further relief for high unemployment states, the bill includes measures explicitly and implicitly designed to bring the country closer to universal health care.
The act contains $600 million in training dollars for primary care providers “to address the shortages and prepare our country for universal health care.” Funds will support training for doctors, dentists, nurses, and medical students who commit to work in underserved communities.
To stretch health care coverage the bill makes some significant changes to the COBRA program for unemployed workers 55and older and those who have been steadily employed for 10 years. These people will be able to “retain their COBRA coverage until they become Medicare eligible or secure coverage through a subsequent employer.” The COBRA adjustments also provide a 65 percent subsidy for the first 12 months to those who lost their jobs on or after September 1, 2008.
For those who are not voluntarily unemployed and live at 200 percent of the federal poverty level (or a level set by the State), states have the option of adding them and their dependents to the Medicaid rolls. Eligibility is also extended to people receiving food stamps.
These are ambitious measures that could go a long way to relieving the pressure of health care costs for many Americans. It is important to remember, however, that the American Recovery and Reinvestment Act is only two-year legislation intended to bring the country out of the current recession. It is by no means clear that these changes would become permanent.
