The final version of the massive American Recovery and Reinvestment Bill signed into law by President Barack Obama yesterday includes $59 billion for healthcare – a top Democratic priority. Though stymied by the loss of his Health and Human Services (HHS) Secretary nominee and director of the White House office of health care reform, Tom Daschle, the passage of the bill including these spending measures is a significant victory for President Obama who campaigned on a promise to reform healthcare.
The flagship item among the healthcare measures is the 65% subsidy of COBRA premiums for up to nine months for workers who have lost their jobs. COBRA is the federal program that allows workers to continue on their previous employer’s healthcare plan. However, they must pay the entire cost of the premium, which is often cost-prohibitive, especially when trying to make ends meet on unemployment insurance. The Joint Committee on Taxation estimates that this provision would help seven million people maintain their health insurance and would cost an estimated $24.7 billion.
Another very large item is $19 billion for health information technology infrastructure and Medicare and Medicaid incentives to encourage doctors, hospitals, and other providers to adopt Electronic Health Records (EHRs) and other health IT. The Congressional Budget Office (CBO) estimates that this investment has the potential to increase adoption of EHRs to 90 percent of doctors and 70 percent of hospitals within the next decade.
But how would EHRs stimulate the economy? While the CBO estimates that the government will save more than $12 billion and generate additional savings throughout the health sector, the answer remains unclear.
The National Institutes of Health (NIH), the Veteran’s Health Administration (VHA), Indian Health Service (IHS), Centers for Disease Control (CDC), and Department of Defense (DoD) will all receive significant chunks of money. With these funds they will do research comparing the effectiveness of healthcare strategies, make investments in preventive healthcare, build new facilities and repair existing ones.
The new law also recognizes that many Americans lack health insurance and/or live in areas where healthcare is simply not readily accessible. $500 million will go to Community Health Centers (CHC) to provide care for uninsured and underserved rural and urban populations. Another $500 million will fund training programs for primary care providers willing to work in underserved locations.
Despite slight modifications in the amounts for individual items, it appears that the final version that is now law is essentially unchanged from the original House bill in terms of healthcare. This law will not solve all the problems of the American medical system, but President Obama and Congressional Democrats are betting that it will be a step in the right direction.
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