On February 17,
twenty-eight days after his inauguration, President Obama signed
into law the American Recovery and Reinvestment Act of 2009 (ARRA or
"Stimulus Act"). See
http://appropriations.house.gov. The law is more than 1,000
pages long and includes provisions relating to nearly every
Department of the federal government. It is divided into Divisions
A and B; A is entitled "Appropriations Provisions" and B is entitled
"Tax, Unemployment, health, State Fiscal Relief, and Other
Provisions." Much of the $311 billion in appropriations included in
the Act must be spent by the end of 2010.
Significantly, the Act includes an entire Title relating to
accountability and transparency, as well as specific references in
various other sections to increased appropriations for Inspectors
General of the Departments and for the Comptroller General, through
the Government Accountability Office, to conduct oversight.
Reflecting a growing awareness in the health policy world of the
importance of the development of health information technology, the
Act devotes more than 200 pages to that subject, including creating
a health IT infrastructure, and including various health IT
provisions in Medicare and Medicaid.
Also reflecting a growing concern about health care costs in general
and what value we get for the dollars we spend, the Act includes
money for research to determine the comparative effectiveness of
various medical interventions.
Also significantly, provisions relating to increases in public
benefits include protections against those increases adversely
affecting eligibility for other public benefits.
Of most immediate and direct relevance to the health care needs of
individuals, the Act:
- Extends until
December 2010 the Qualified Individual (QI) program that pays
Medicare Part B premiums for certain low-income Medicare
beneficiaries;
- Increases
access to COBRA benefits for individuals formerly eligible for
health insurance coverage from their employers; and
- Provides
fiscal relief for state Medicaid programs that serve, among their
more than 50 million recipients, 8.8 million low-income Medicare
beneficiaries.
This Alert will
address these three latter provisions of the Act: QI, COBRA and
state Medicaid fiscal relief. Future Weekly Alerts will look at
other relevant provisions of the Act.
Extension of Qualified Individual Program
QI is a Medicaid program that pays the Part B premium for
individuals with incomes between 120% and 135% of the federal
poverty level ($12,996 - $14,620/year for an individual in the lower
48 states in 2009) and limited resources. The program has been
extended for short periods of time ever since its initial expiration
date in 2002. The ARRA, Division B, Title V, Section 5005, further
extends QI through December 2010. It also adds $572,500,000 to
cover the program costs for calendar year 2010. This reflects an
increase of $72.5 million over the calendar year 2009 appropriation
and $172.5 million over appropriations for years prior to 2009.
Premium Assistance for COBRA Beneficiaries
Division B, Title III, Section 3001 provides for assistance with 65%
of the cost of the premium for COBRA health care continuation
insurance for eligible individuals. COBRA premium assistance is
available to individuals who became or who will become eligible for
COBRA between September 1, 2008, and December 31, 2009, who elect
COBRA coverage, and whose COBRA qualifying event is involuntary
termination of employment. The premium assistance begins on or after
the date of enactment, February 17, 2009, and lasts for up to nine
months. Assistance ends sooner if the maximum time period for COBRA
coverage ends sooner or if the individual becomes eligible either
for coverage under another group health plan or for Medicare.
Individuals must notify their group health plan that they are no
longer eligible for the COBRA premium assistance according to rules
to be developed by the Secretary of Labor.
Individuals who would be eligible for premium assistance but for the
fact that they did not elect COBRA coverage will have an extended
opportunity to elect COBRA coverage, beginning on February 17, 2009,
and ending 60 days after notice is provided.
The statute sets requirements for all COBRA notices and time frames
for the Secretaries of Labor and of Health and Human Services to
develop notices. It also requires outreach consisting of public
education and enrollment assistance.
The statute also provides individuals with the opportunity to enroll
in a different coverage option from the coverage option in which
they were enrolled at the time of their COBRA qualifying event if
such option is available. Individuals whose request for premium
assistance is denied will have an opportunity to request expedited
review, with a determination about eligibility to be made within 15
business days after receipt of the application for review. The
premium reduction does not count toward income or resources for any
federal, state, or local public benefit program.
Increase in Federal Share of Medicaid Costs
Medicaid serves over eight million individuals who are also eligible
for Medicare. These dually eligible beneficiaries are the poorest
of Medicare beneficiaries and have among the highest health care
needs of the population. States provide them various benefits that
supplement Medicare either by paying some or all of Medicare's
cost-sharing, or by covering services not covered by Medicare, or
both. States pay, based on a formula, between 17% and 50% of the
costs of Medicaid, with the federal government paying the rest. The
federal portion is referred to as the Federal Medical Assistance
Percentage, or FMAP.
Division B, Title V, Section 5001 increases the FMAP of Medicaid
payments in three ways. First, it allows states for which the
federal percentage decreased in 2009 to use their 2008 rate, and
similarly, for 2010 and 2011, to use the highest federal rate that
applied in any year since 2007.
Secondly, the Act provides an across-the-board increase of 6.2% in
the FMAP during the
"recession adjustment period" (defined as October 2008 through
December 2010), so that a state paying the highest state share of
50% would, under the ARRA, pay 43.8%.
Third, the Act includes an additional FMAP increase based on
unemployment rates in individual states, with three levels of
adjustment. For calendar quarters in which a state's unemployment
rate increased between 1.5% and 2.5%, the additional FMAP increase
would be 5.5% (based on a somewhat complex formula taking into
account the first and second FMAP adjustments described above); an
increase between 2.5% and 3.5% would result in an 8.5% adjustment,
and an increase above 3.5% would result in 11.5% adjustment.
To be eligible for the increases, states generally must maintain
eligibility and services at the level provided on July 1, 2008.
Each of these provisions will have positive effects on individuals
needing health care. Other provisions of the Stimulus Act, to be
discussed in future Alerts, have great potential to help
beneficiaries as well, though their effects are more indirect and
complex. |
