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Funds For Health IT, Prevention And Cobra Included In Stimulus Deal

By Mary Agnes Carey, CQ HealthBeat Associate Editor

February 12, 2009 -- States would receive $87 billion in additional Medicaid money, doctors and hospitals would receive $19 billion to help the adopt health information technology systems and unemployed workers who met certain income levels would receive financial assistance to help them afford health insurance for up to nine months as part of economic stimulus legislation scheduled for a House vote Friday.

The measure (HR 1) would invest $1 billion in prevention and wellness programs as well as $1.1 billion for federally funded studies to determine the effectiveness of drugs, devices and medical procedures. The Agency for Healthcare Research and Quality, the National Institute of Health (NIH) and the secretary of the Department of Health and Human Services (HHS) would receive those funds, according to a summary released by House and Senate appropriations committees.

Other health-related elements of the deal include $8.5 billion for biomedical research at the National Institutes of Health (NIH) to study diseases such as Alzheimer’s, Parkinson’s, cancer and heart disease and another $1.5 billion for NIH to renovate university facilities.

According to a summary released by the Senate Finance and House Ways and Means committees, states would receive nearly $87 billion in additional federal Medicaid funding for a 27-month period than began last Oct. 1 and would continue through Dec. 31, 2010. States will not be allowed to change their eligibility requirements for the program during that time.

In a statement, Sen. Charles E. Grassley, R-Iowa, the Senate Finance Committee’s ranking member, said under the formula in the bill, Iowa, along with 33 other states and the District of Columbia, will receive less Medicaid money than larger states. The stimulus package “shortchanges” Iowa by $185 million, Grassley said.

“It disregards the tough economic situation facing our state and others and it fails to understand that the recession is hitting places like Iowa a little later than other states, but it is still hitting us,” Grassley said in a statement. He tried but failed to chance the package’s Medicaid language during Senate debate.

The stimulus package would help laid-off workers purchase health insurance from their employers under the COBRA program. COBRA premiums are often prohibitively expensive and consume much of government unemployment benefit payments.

Under the stimulus measure, federal subsidies for health insurance under COBRA would cover 65 percent of the cost of premiums for nine months for workers whose incomes do not exceed $125,000 for individuals and $250,000 for families. To qualify, workers must have been involuntarily terminated from their jobs from between last Sept. 1 and Dec. 31, 2009. The House-passed version called for a 65 percent subsidy but only for nine months while the Senate bill would have provided a 50 percent subsidy of their COBRA premiums for 12 months.

American Heart Association President Timothy Gardner said the COBRA provisions in the measure would help “close gaps in care for many who need ongoing treatment for chronic disease” such as heart disease and stroke which have high mortality rates.

The $19 billion in health information technology funding includes $2 billion in discretionary funds and $17 billion for investments and incentives offered through the Medicare and Medicaid programs to help increase the use of “health IT” in hospitals, doctors’ office and other medical facilities. The bill would require the government “to take a leadership role” to develop standards by 2010 that would allow health information to be exchanged nationwide.

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