The American Recovery and Reinvestment Act: Investing in Health Care

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Providing Health Insurance for Unemployed Workers

• To help people maintain their health coverage, the bill provides a 65% subsidy for COBRA premiums for up to 9 months for people who were involuntarily separated from their jobs between 9/1/08 and 12/31/09.  The assistance is limited to individuals with  incomes up to $125,000 and families with incomes up to $250,000.

COBRA currently provides temporary coverage for workers between jobs, but it is expensive.  A typical family premium on COBRA is over $1,000 a month. The Joint Committee on Taxation and CBO estimate 7 million people will receive assistance for the cost of their health insurance coverage.  

Have questions about COBRA? Click here and here.

Protecting Health Care Coverage for Millions Through Medicaid

• To help budget-strapped states avoid cuts in Medicaid enrollment and coverage, the bill provides states an estimated $87 billion in additional federal matching funds for Medicaid over a two-year period.  Under the bill, every state gets an across-the-board increase in matching funds of 6.2% and then there is a schedule of additional bonus payments based on the increase in the state’s unemployment rate.

New Jersey will receive $2.2 billion through December 2010 for Medicare.

Modernizing Health Care System to Lower Costs and Save Lives

• Provides $19 billion to accelerate adoption of Health Information Technology (HIT) systems by doctors and hospitals, in order to modernize the health care system, save billions of dollars, reduce medical errors and improve quality.

The nonpartisan Congressional Budget Office (CBO) estimates that, as a result of this legislation, approximately 90 percent of doctors and 70 percent of hospitals will be using electronic health records within the next 10 years.

CBO estimates that this proposal will reduce the health care costs of the federal government by over $12 billion over 10 years and it will generate additional savings throughout the health sector through improvements in quality of care, care coordination, and reductions in medical errors and duplicative care.  

Investing in Prevention and Wellness

• Provides $1 billion for a new Prevention and Wellness Fund.
• Includes funding for immunization programs; because 156 million Americans go without the flu vaccine every year, the bill makes a significant investment in immunizations to remove the cost barrier.    

Other Key Health Care Investments & Other Provisions

• Invests $10 billion for NIH, including for expanding good jobs in biomedical research to study diseases such as Alzheimer’s, Parkinson’s, cancer, and heart disease, and for improving NIH facilities.
• Invests $2 billion in community health centers (CHCs) – including two in New Jersey – to increase the number of uninsured Americans who receive quality health care and to renovate clinics and make health information technology improvements.  More than 400 applications for new or expanded CHC sites currently remain unfunded.
• Invests $1.1 billion in comparative effectiveness research, to evaluate the relative effectiveness of different health care services and treatment options.  This research will improve the quality of care.
• Invests $500 million for the training of doctors, dentists, and nurses, in order to address the shortage of primary care providers; also funds helping pay medical school expenses for students who agree to practice in underserved communities.