|THIS WEEK IN HEALTHCARE
What happened in healthcare this week—and what we think about it.
Observing an unhappy anniversary, with better days ahead
This week marked the one-year anniversary of the COVID pandemic, at least as measured from the World Health Organization’s official declaration on March 11, 2020. Over the past year, the virus has infected more than 119M people worldwide, killing more than 2.6M; the US represents nearly 25 percent of those cases, and 20 percent of the deaths. With 10 percent of the US population now fully vaccinated against the virus, and a quarter of Americans having received at least one vaccine dose, the light at the end of the tunnel is growing increasingly bright. This week, in a primetime address to the nation, President Biden directed states to make every adult American eligible for vaccination by May 1st, and set a goal of “independence from this virus” by July 4th. The Centers for Disease Control and Prevention released new guidelines for what vaccinated people can safely do, greenlighting small indoor gatherings with other vaccinated people without masking, as well as visits with low-risk, unvaccinated people. While scientists still warn that the more contagious variants of the virus could cause a dangerous “fourth wave” of COVID cases, early evidence from Florida, where the B.1.1.7, or British variant, is now predominant, shows no sign of a new spike in the disease. With more than 100M Americans at least partially vaccinated against the virus, and millions more likely carrying some immunity from previous illness, there is simply a diminishing number of targets for the disease to infect. Summer is looking more and more promising—we can almost taste those 4th of July hot dogs and hamburgers now. Just a little longer.
The ARP comes to the rescue of the ACA, for now
On Thursday, President Biden signed the American Rescue Plan (ARP) Act of 2021 into law, committing nearly $1.9T of federal spending to boost the nation’s recovery from the coronavirus pandemic. In addition to direct payments to American families, extension of unemployment benefits, several anti-poverty measures, and aid to state and local governments, the plan also contains several key healthcare measures. Approved by Congress on a near party-line vote using the budget reconciliation process, the law includes the broadest expansion of the 2010 Affordable Care Act (ACA) to date. It extends subsidies for upper-middle income individuals to purchase coverage on the Obamacare exchanges, caps premiums for those higher earners at a substantially lower level, and boosts subsidies for those at the lower end of the income scale. The Congressional Budget Office (CBO) estimates that expanded ACA subsidies in the ARP will result in 2.5M more Americans gaining coverage in the next two years. Fully subsidized COBRA coverage for workers who lost their jobs due to COVID is also extended through the end of September, which the CBO estimates will benefit an additional 2M unemployed Americans. The ARP also puts in place new support for Medicaid, enhancing coverage for home-based care, maternity services, and COVID testing and vaccination, and providing new incentives for the 12 states which haven’t yet expanded Medicaid eligibility under the ACA to do so. In addition to the ACA’s 90 percent match for those states’ Medicaid expansion populations, the lucky dozen will also receive a 5 percent bump to federal matching for the rest of their Medicaid populations should they choose to expand.
Three policy changes of keen interest to providers were left out of the final version of the bill. First, while a special relief fund of $8.5B was created for rural providers, there was no additional allocation of relief funds for hospitals and other providers, similar to the $178B allocated by the CARES Act, despite initial proposals of up to $35B in additional funding. (Around $25B of the initial round of provider relief is still unspent.) Second, the ARP did not extend or alter the repayment schedule for advance payments to providers made last year, in spite of industry pressure to implement more favorable repayment conditions. Finally, the new law does not extend last year’s pause on sequester-related cuts to Medicare reimbursement, although the House is expected to consider a separate measure to address that issue next week. Notably, the coverage-related provisions of the ARP are only temporary, lasting through September of next year. That sets up the 2022 midterm elections as yet another campaign cycle dominated by promises to uphold and protect the Affordable Care Act—by then a 12-year-old law bolstered by this week’s COVID recovery legislation.