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Health Programs to Get Boost from Stimulus

By Alex Wayne, CQ Staff

JANUARY 15, 2009 -- House leaders plan to pump $157.5 billion into a wide variety of health care programs—including Medicaid and health insurance for people who lose their jobs—as part of a massive economic stimulus bill they announced Thursday.

According to a summary of the measure, the largest chunk of the money, $95.6 billion, would go to state governments to bolster Medicaid, the health insurance entitlement for the poor. Medicaid is jointly funded by the state and federal governments. Washington picks up the larger share of the cost, while states administer the program.

The House Democrats' plan would have the federal government pick up more of the program's costs in every state. It also would fund an expansion of Medicaid to cover low-income people who involuntarily lose their jobs through 2010.

Democrats intend to spend $30.3 billion to allow people who lose their jobs to keep their employer-provided health insurance under a program known as COBRA. Currently, COBRA coverage expires after 18 months. Under the Democratic plan, people 55 and older or those with 10 years or more tenure in their jobs could continue COBRA coverage until they find a new job or until they are old enough to enter Medicare. Democrats also propose covering 65 percent of the costs of COBRA coverage for the first year any worker is unemployed.

Under current law, newly jobless workers must pay both the employer and employee's shares of the insurance premiums—a burden too great for many households that have lost their breadwinners.

Democrats also plan to use the stimulus to break a policy logjam that has long confounded Congress: How to encourage more hospitals and physicians to use electronic medical records instead of paper records.

Congress has been debating since at least 2005 how to spread adoption of what is known as health information technology, or health IT. But lawmakers have been stymied over disagreements about who should pay the substantial costs of installing new computer systems and software, and the proper scope of privacy protections for patients' medical records.

The stimulus bill would provide $20 billion for health providers to purchase electronic medical records systems, though it was not clear as of midday Thursday how that money would be distributed, whether it would be grants or loans, or how privacy issues would be addressed.

Other Provisions

The bill also contains many smaller health spending provisions:

  • $3.5 billion for the National Institutes of Health, the nation's primary source of funding for biomedical research. Of that, $2 billion would go directly to NIH to fund new research grants and renovations at the agency's campuses, while $1.5 billion would be passed along to universities conducting NIH-sponsored research for renovation of their laboratories. Current funding for the NIH is about $29.4 billion a year.
  • $3 billion to encourage preventive health and wellness programs. Many lawmakers complain that the nation's health policy—particularly in Medicare, the government's biggest health entitlement—emphasizes acute care for illnesses instead of preventive measures like regular check-ups, various screening and tests, and lifestyle changes. More preventive care, many health experts say, could reduce the need for more expensive acute care in hospitals.
  • $1.5 billion for community health centers. Most of this money—$1 billion—would go toward renovations of existing centers, while $500 million would be for expansions or new centers. Community health centers provide basic health care to millions of mostly low-income people who typically have no health insurance or are under-insured. President Bush made the expansion of those centers a priority during his administration, but current funding for the centers is about $2 billion a year.
  • $1.1 billion for studies comparing the effectiveness of different medical treatments. Many lawmakers say such "comparative effectiveness" research is essential to controlling the costs of health care; it is thought that unnecessary or ineffective tests and treatments are common. But it is not clear how the studies would be performed.
  • $600 million to train primary care physicians and doctors who agree to enter the National Health Service Corps, which places health care workers in medically under-served areas such as rural communities or inner cities.
  • $900 million for research into a vaccine for a hypothetical pandemic flu and into defenses against chemical and biological weapons.
  • $462 million for construction and renovations at the campuses of the Centers for Disease Control and Prevention.

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