Health

Senate narrowly passes COVID-19 package that includes ACA subsidy boost, rural hospital money

The Senate narrowly approved a $1.9 trillion COVID-19 relief package that includes new funding for rural hospitals but not as much as hospital groups have asked for.

The Senate passed the package in a 50-49 vote on Saturday and the package is expected to go to the House for a vote early next week. If approved there, it would advance to President Biden, who is expected to sign it into law. The package includes several healthcare-related provisions including a temporary two-year boost to ACA subsidies.

The Senate did add some things to the package that was different from the version passed by the House over a week ago. The legislation now includes $8.5 billion for rural hospitals to help facilities that have been slammed financially by the pandemic.

But it falls far short of other priorities from provider groups.

Several hospital organizations such as the American Hospital Association (AHA) had asked for $35 billion to be added to a provider relief fund created under the CARES Act. The association estimated last month that roughly $4.4 billion was left in the $174 billion fund.

The AHA said that hospitals are still in a financially precarious position due to the pandemic, especially smaller and rural hospitals that traditionally operate on thin margins.

Another major priority was also not included: extending a moratorium on the 2% Medicare payment cut created under sequestration.

RELATED: Hospitals could lose between $53B and $122B this year due to pandemic

Congress paused the sequester cuts at the onset of the pandemic. However that moratorium ends on March 31.

Providers have wanted another extension as “it is clear that the COVID-19 pandemic will extend well beyond the first quarter of this year,” according to a letter from the American Medical Association (AMA) to Congressional leaders.

The AMA also asked for Congress to halt an increase in the cuts to 4% in 2022.

Some hospital groups said before the final vote that they were disappointed in the lack of extra funding and language changing the moratorium.

“Our hospitals continue to face severe financial stress from the pandemic, and the COVID relief bill, as it now stands, would fall short of what they need,” said Carlos Jackson, vice president of legislative affairs for America’s Essential Hospitals, which represents safety-net providers. “It would be a disappointing step backward to increase only minimally the Provider Relief Fund and to reinstate the Medicare sequester.”

Boosting ACA subsidies, COBRA benefits

Insurers will likely be happy with a temporary boost to income-based subsidies for customers on the Affordable Care Act’s exchanges for 2021 and 2022.

Under current law, anyone making 400% above the federal poverty level are not eligible for subsidies to pay down the cost of insurance.

However, under the legislation, anyone making 400% above the poverty level won’t have to pay more than 8.5% of their income on health insurance.

The bill would also ensure that low-income customers won’t have to pay anything for their coverage.

Currently, those making 150% above the poverty level pay no more than 4.3% of their income on healthcare. But the legislation would make their coverage fully subsidized.

The legislation would also offer premium assistance to cover up to 85% of COBRA costs for eligible individuals and families through the end of September.

Another change in the Senate version from the House concerns the removal of a cap on the Medicaid drug rebate, changing the removal of the cap to 2024 instead of 2023. The removal of the rebate cap, which kicks in at 100% of a drug’s average manufacturing price, will lead to higher rebates for Medicaid drugs.

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