As the U.S. House of Representatives and Senate worked on the economic stimulus package and reauthorization of the State Children’s Health Insurance Program (SCHIP), a number of stories in the news this week made the case for legislative intervention.
The Department of Health & Human Services released a report showing that the number of children covered by SCHIP increased to 7.4 million in 2008, a four percent increase over 2007. The Commonwealth Fund released an analysis showing that in 2006, only nine percent of laid-off workers took up coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA). According to the analysis, a major factor in the low rate of COBRA coverage was the prohibitive cost of taking up COBRA, which is often four to six times the cost of premiums a worker paid while employed. Fitch Ratings’ nonprofit hospital and healthcare system sector outlook for 2009 emphasized the effect of increasing unemployment on depressed operating profitability. Meanwhile, a study in the Archives of Internal Medicine held out the promise of healthcare IT in reducing both morbidity and costs at hospitals.
The economic stimulus and SCHIP reauthorization bills currently working their way through Congress would direct more than $170 billion in new spending at these issues. In a post on The Wall Street Journal’s Health Blog, reporter Sarah Rubinstein notes, “You might mistake the economic stimulus package slated for a House vote today for a health-reform bill, if weren’t sprinkled with some goodies for other sectors of the economy.” The New York Times, relying on an analysis by the Congressional Budget Office, breaks down $127 billion of the money slated for healthcare stimulus spending as follows: $87 billion to increase the federal share of Medicaid, $11 billion to finance Medicaid coverage for individuals who would not otherwise qualify, and $29 billion to subsidize private insurance. The private insurance subsidies would include payments by the U.S. government of 65 percent of laid-off workers' COBRA premiums for a year. On top of the $127 billion for coverage initiatives is another $20 billion for healthcare IT.
As of Thursday, Jan. 29, both the House and Senate have approved similar versions of a bill that would expand SCHIP coverage to more than 4 million uninsured children by 2013, while continuing coverage for the more than 7 million children already in the program. The estimated cost of this coverage is $32 billion in additional SCHIP spending over the next 4 1/2 years. The bill expands coverage to children and pregnant women who are legal immigrants, ending a current five-year ban on coverage for legal immigrants.
In the words of Representative Michael C. Burgess (R-Tex.), "It's raining money." This week’s outlook from Fitch, however, predicts that stimulus spending might be beneficial to hospitals and health systems in the long term, but does not expect that it will provide immediate relief. Share your thoughts on the stimulus package and its potential effects on providers by commenting below.
