Stimulus Bill Provides Important Health Care & Benefit Provisions

Stimulus Bill Provides Important Health Care & Benefit Provisions

On February 17, 2009, President Barack Obama signed into law the American Recovery and Reinvestment Act of 2009, Pub. L. No. 110-329. The Recovery Act authorizes $789 billion in new federal spending to save or create 3.5 million jobs, reduce taxes for low- or moderate-income households, help provide health coverage for people who have lost their jobs, protect Medicaid beneficiaries from state cuts, invest in the nation’s infrastructure, and more. The law contains provisions relating to Medicare, Medicaid (Medi-Cal in California), the Administration on Aging (AoA), and Social Security, including a one-time payment of $250 to each of the more than 60 million beneficiaries receiving Social Security and/or Supplemental Security Income (SSI). Below is a brief highlight of the Recovery Act’s provisions relating to these programs.

  • The Qualified Individual (QI) program is extended to December 31, 2010. (The Medicare Improvements for Patients and Providers Act of 2008 – MIPPA – extended it until December 31, 2009.) This program pays the Medicare Part B monthly premium for qualified beneficiaries with low-incomes and assets.
  • A 65% tax subsidy for the cost of health benefits through COBRA. COBRA, the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1986 (PDF) is the federal law that gives certain employees the right to continue their group health insurance when it would otherwise end.   As COBRA coverage can be quite expensive, this tax subsidy makes this continued health care coverage more affordable for the unemployed and their families. Millions of individuals, including those who previously declined employer-provided coverage under COBRA, are eligible to receive a subsidy on their premiums for up to 9 months after being involuntary terminated from their job. People who lost or lose their jobs on or after September 1, 2008 through December 31, 2009 can qualify for this subsidy. See the Department of Labor’s website for more information on the COBRA subsidy.
  • A one-time payment of $250 will be sent to people who receive Social Security benefits, Supplemental Security Income (SSI), Veterans Affairs or Railroad Retirement benefits. The Administration on Aging expects all payments to be delivered by late May 2009.  People should not contact the Social Security Administration (SSA) unless they do not receive the check by June 4, 2009. Payment will not count as income when determining eligibility for or the amount of benefits under any Federal or federally funded program, such as SSI, Medicaid (Medi-Cal in California), Medicare Part D’s Low-Income Subsidy, Food Stamps or housing assistance. Also, it does not count toward the resource limit for SSI or any other Federal or federally funded program for 9 months following the date of receipt.
  • Increased Federal Medical Assistance Percentage (FMAP) of Medicaid payments. The FMAP is the federal reimbursement rate for state Medicaid spending. The Recovery Act includes at least a 6.2% increase in every state’s FMAP – this will provide more federal dollars for every dollar California’s Medi-Cal program spends.
  • Funding for Health Information Technology (IT) in Medicare and Medicaid. The Recovery Act requires the Federal government to take the lead in health information technology (such as electronic health records) by establishing standards for nationwide electronic exchange and use of health information to improve quality and coordination of care by 2010. The provision also invests $19 billion in health information technology infrastructure and Medicare and Medicaid incentives to encourage doctors, hospitals and other providers to use health IT for electronically exchanging patients’ health information.
  • Funding for Administration on Aging provisions. The Recovery Act includes $100 million for congregate meals programs and home-delivered meals programs run by the AoA.

For more information on the Recovery Act, see:

Our blogger Karen J. Fletcher is CHA's publications consultant. She provides technical expertise, writing and research on Medicare, health disparities and other health care issues. With a Masters in Public Health from UC Berkeley, she serves in health advocacy as a trainer and consultant. See her current articles.