Earlier this month Congress passed The American Rescue Plan Act of 2021, a COVID-19 stimulus package that President Biden later signed into law. The $1.9 trillion dollar package expands portions of the CARES Act, the stimulus bill passed in March of last year, such as extending expanded unemployment benefits and issuing new direct payments to Americans in hopes of offsetting the damage that the pandemic has inflicted on American families and the economy. Within the lengthy bill is a variety of new healthcare-related funding, from COVID test and vaccination efforts to nursing loan repayment programs. Today we are going to focus on three key elements of the American Rescue Plan that will have the greatest impact on revenue for health systems.
- COBRA
Millions of Americans have experienced job loss due to the COVID crisis, which means millions also have lost health insurance coverage at a time when they need it the most. The new stimulus bill subsidizes 100% of premiums for COBRA recipients through the end of September providing an additional cushion for an estimated 2.2 million and offsetting a lot of potential bad debt for health providers.
- ACA
The bill makes a number of temporary changes to the Affordable Care Act that caps premiums for certain income brackets. Increases in subsidies available to low-income households are predicted to drop the premiums for more than 3 million Americans and allow nearly an additional three million uninsureds to seek coverage. The income limit on premium subsidies was removed changing eligibility for anyone whose premium is more than 8.5% of their income. Special rules were created that tie unemployment to the maximum amount of subsidies, providing insurance coverage in the instance of job loss, as well as providing new protection for subsidy recipients that experienced income fluctuations over the last year.
- Medicaid and CHIP
The Rescue plan expanded options or COVID testing for uninsured individuals and requires coverage of vaccinations and treatments. It also prompts states to makes pro-coverage changes by allowing up to 12 months of post-partum coverage and introducing new incentives for expanding Medicaid. Additional changes to Medicaid include adjustment to the wage index for “urban states” which could boost payments, and Disproportionate Share Hospital (DSH) recalculations set to retroactively coincide with increases in the Federal Medical Assistance Percentage (FMAP) ensuring payments aren’t negatively impacted and allocate $8.5 billion in relief to rural Medicare/Medicaid providers for revenue loss related to COVID-19.
Only time will tell the true impact of the American Rescue Plan but the improvements in affordability and coverage for patients can only improve a revenue cycle recently stunted by COVID-19. Read the full American Rescue Plan Act here.
Earlier this month Congress passed The American Rescue Plan Act of 2021, a COVID-19 stimulus package that President Biden later signed into law. The $1.9 trillion dollar package expands portions of the CARES Act, the stimulus bill passed in March of last year, such as extending expanded unemployment benefits and issuing new direct payments to Americans in hopes of offsetting the damage that the pandemic has inflicted on American families and the economy. Within the lengthy bill is a variety of new healthcare-related funding, from COVID test and vaccination efforts to nursing loan repayment programs. Today we are going to focus on three key elements of the American Rescue Plan that will have the greatest impact on revenue for health systems.
- COBRA
Millions of Americans have experienced job loss due to the COVID crisis, which means millions also have lost health insurance coverage at a time when they need it the most. The new stimulus bill subsidizes 100% of premiums for COBRA recipients through the end of September providing an additional cushion for an estimated 2.2 million and offsetting a lot of potential bad debt for health providers.
- ACA
The bill makes a number of temporary changes to the Affordable Care Act that caps premiums for certain income brackets. Increases in subsidies available to low-income households are predicted to drop the premiums for more than 3 million Americans and allow nearly an additional three million uninsureds to seek coverage. The income limit on premium subsidies was removed changing eligibility for anyone whose premium is more than 8.5% of their income. Special rules were created that tie unemployment to the maximum amount of subsidies, providing insurance coverage in the instance of job loss, as well as providing new protection for subsidy recipients that experienced income fluctuations over the last year.
- Medicaid and CHIP
The Rescue plan expanded options or COVID testing for uninsured individuals and requires coverage of vaccinations and treatments. It also prompts states to makes pro-coverage changes by allowing up to 12 months of post-partum coverage and introducing new incentives for expanding Medicaid. Additional changes to Medicaid include adjustment to the wage index for “urban states” which could boost payments, and Disproportionate Share Hospital (DSH) recalculations set to retroactively coincide with increases in the Federal Medical Assistance Percentage (FMAP) ensuring payments aren’t negatively impacted and allocate $8.5 billion in relief to rural Medicare/Medicaid providers for revenue loss related to COVID-19.
Only time will tell the true impact of the American Rescue Plan but the improvements in affordability and coverage for patients can only improve a revenue cycle recently stunted by COVID-19. Read the full American Rescue Plan Act here.