Tuesday, February 24, 2009

Health Care and the Stimulus Package

The recently passed financial stimulus includes several measures that will increase federal funding for health care in the United States. Most notably, COBRA coverage for the laid off will be subsidized by 65% for nine months, which will help 7 million retain health insurance at a cost of almost $25 billion.

Other provisions in the stimulus package include:

  • Investments in health care information technology infrastructure to encourage greater adoption of electronic health records; this will include Medicaid and Medicare incentives. The Congressional Budget Office estimates that this will save the government and health care industry over $12 billion. ($19 billion cost)
  • Funding for training programs to encourage doctors to practice in under-served locations ($500 million)
  • Community Health Centers in rural and urban areas that are under-served by doctors and serve many uninsured individuals will also receive funding ($500 million)
  • An unknown amount of funding will go to several Cabinet departments (including the Centers for Disease Control, Veteran's Health Administration, Indian Health Service, Department of Defense, and the National Institutes of Health) in order to build and repaid health care facilities, invest in preventative health care, and research health care strategies.
Many Democrats have been calling for health care reform, and these items might be part of that process.

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Friday, January 23, 2009

Senate, House Consider COBRA Health Insurance Subsidies

As part of the financial stimulus, the Senate Finance Committee is considering a temporary subsidy for a portion of COBRA health insurance premiums for laid-off worker, says Jerry Geisel of Business Insurance. People who have been laid off (or will be let go) from September 1st, 2008 until December 31st of this year are eligible. The proposal entails the federal government paying 65% of premiums for up to nine months.
Currently, many former employees end up uninsured because they are unable to pay the significantly higher charges under COBRA compared to their former employer-based insurance plans. That is because employers no longer chip in a portion of the insurance costs for former employees. COBRA also charges a percentage fee on top of that! It isn't used as much as much as it could be as a result.
The House of Representatives' Ways and Means Committee, meanwhile, is deliberating a 12-month subsidy for health insurance premiums under COBRA.

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