What are the American Rescue Plan Act’s health care impacts?

March 18, 2021

Last week, President Biden signed the American Rescue Plan Act of 2021 (also called the COVID-19 Stimulus Package) into law. The $1.9 trillion relief package will have significant impacts on hospitals and health systems. WSHA was very active in communication with our D.C. delegation, and we applaud the investments in health care made by the law.

The law included significant funding to strengthen the public health response to COVID-19. Ten billion dollars was designated for manufacturing and procuring medical supplies and equipment – diagnostics, PPE, drugs and biological products – under the Defense Production Act. Seventy billion dollars was designated for COVID-19 vaccine, testing and workforce, including more than $15 billion to increase access and distribution, $6 billion for research, development, manufacturing, production and purchase of vaccines, and $1 billion to combat vaccine hesitancy.

Additional funds were allocated to continue implementation of a national testing strategy and to support state and local governments, including $4.3 billion for Washington State to mitigate fiscal impacts of the pandemic.

Rural health care was also specifically supported in the relief package, with $8.5 billion designated to reimburse rural health care-related providers for health care-related expenses and lost revenues attributable to COVID–19. Eligible rural hospitals can also apply for grants to offset these costs.

There are several changes to Medicaid financing and eligibility rules aimed at expanding coverage included in the legislation. WSHA has long-supported coverage expansion and is pleased to see these provisions. For the next five years, states will be allowed to extend Medicaid and the Children’s Health Insurance Program (CHIP) eligibility to pregnant individuals for 12 months postpartum. The law also requires Medicaid and CHIP coverage of COVID-19 vaccines without beneficiary cost-sharing.

However, we are disappointed that the bill does not include other provisions advocated by WSHA and the American Hospital Association. These include additional funding for the Provider Relief Fund, forgiveness of advance Medicare payments and extension of the moratorium on the 2 percent Medicare sequester reduction. A full analysis of the health care-related provisions in the bill is below.

For more analysis on the health care impacts of the American Rescue Plan Act, please view the online bulletin WSHA published last week. For additional information and resources, the Washington Health Benefit Exchange has also published an FAQ page about the Act and provided an overview of its impact on health benefits.


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