kaisernetwork.org – Feb. 19, 2009.

Summaries of some the potential effects of the recently enacted economic stimulus package appear in this article, including COBRA subsidies, effectiveness research, effects on hospitals and states. Click title to read more…

Kaiser Daily Health Policy Report provides the following analyses:

• COBRA subsidies: Some employers have raised concerns that a provision in the stimulus package that would provide federal subsidies to help cover the cost of health insurance premiums under COBRA will increase their costs, USA Today reports (Block/Appleby, USA Today, 2/20). Under the provision, workers involuntarily terminated between Sept. 1, 2008, and Dec. 31, 2009, and whose annual incomes do not exceed $125,000 for individuals or $250,000 for families qualify for subsidies to cover 65% of the cost of health insurance premiums under COBRA for as long as nine months (Kaiser Daily Health Policy Report, 2/19). According to USA Today, employers have raised concerns about “how higher COBRA enrollment will affect their insurance costs.” Tom Billet, a senior benefits consultant at Watson Wyatt, said that recently unemployed workers with medical problems are the most likely to take advantage of the subsidies, adding that those individuals are the most likely to seek health care. However, Kathryn Bakich, senior vice president and head of health care compliance practice at Segal, said that she expects a number of healthy, recently unemployed workers to take advantage of the subsidies as well (USA Today, 2/20).
• Comparative-effectiveness research: Some Republicans and health care industry groups have raised concerns that the $1.1 billion included in the stimulus package for research to compare the effectiveness of medications and medical devices will prompt government health care programs and private health insurers to make coverage decisions based on the results of the studies, CQ Today reports. “Suspicion of the policy runs even deeper among some conservatives, who see a slow conspiracy unfolding to eventually ration health care,” according to CQ Today. However, supporters maintain that comparative-effectiveness research would reduce health care costs and increase the quality of care and that such studies will not determine coverage decisions. The “vociferous opposition” to the provision “portends difficult fights ahead when President Obama seeks to make broader changes to the health care system, including an expansion of the comparison studies,” CQ Today reports (Carey/Wayne, CQ Today, 2/19).
• Hospitals: A provision dropped from the final version of the stimulus package under which hospitals could not have contacted former patients for charitable donations likely will prevent reductions in no-cost services for low-income individuals, according to the Association for Healthcare Philanthropy, CQ HealthBeat reports. According to AHP CEO William McGinly, the provision likely would have prompted hospitals to reduce clinics, mammograms, childhood vaccinations and other services provided for low-income individuals (CQ HealthBeat, 2/19).
• States: State officials nationwide have sought to determine the amount of funds for Medicaid and other programs that they can receive through the stimulus package, the Wall Street Journal reports. David Quam, director of federal relations for the National Governors Association, said that states will receive most of the funds for Medicaid and other programs through predetermined formulas and will not have to compete for those funds (Eaton, Wall Street Journal, 2/20). In related news, the Washington Times on Friday examined how a number of governors have sought to take “legislative action to assert their sovereignty under the 10th Amendment” in an effort to block “demands from Washington on how to spend money or enact policy,” as such concerns have a “handful of governors questioning whether to accept federal stimulus money that comes with strings attached” (Dickson, Washington Times, 2/20).

Broadcast Coverage
MSNBC’s “Hardball with Chris Matthews” on Thursday reported on how many Republican governors oppose the stimulus package but plan to accept funds from the package. The segment includes a discussion with Gov. Tim Pawlenty (R-Minn.) (Matthews, “Hardball With Chris Matthews,” MSNBC, 2/19).

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