The health-related provisions in the $2.2 trillion emergency legislation

As the number of Americans infected with the novel coronavirus increased rapidly in recent weeks, Congress responded with three pieces of emergency legislation, including the $2.2 trillion bill assembled by both parties in the Senate that is set to be signed into law soon. This latest bill includes scores of provisions aimed at: stabilizing firms; compensating workers who lose their jobs; providing funds directly to families to prevent a freefall in consumer spending; increasing the capacity of the health system to handle a surge of COVID-19 patients; and speeding the development of therapeutics and vaccines that could hasten the pandemic’s end, or reduce its severity.

The following is a brief overview of the legislation’s key health-related provisions.


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Special Provider Fund Covering Uncompensated COVID-19 Expenses.  The bill provides $100 billion to a special, flexible fund under the control of the Secretary of Health and Human Services, called the “Public Health and Social Services Emergency Fund.” The money can be used to compensate providers of medical services for the costs they incur during the pandemic that are not covered by other payers. It is expected that much of this funding will go to the nation’s hospitals as they incur large, unexpected expenses related to their current urgent efforts to expand capacity in anticipating of large numbers of COVID-19 patients. Other, non-hospital providers participating in Medicare and Medicaid are also eligible to apply for grants. Among other things, this fund could pay for the costs of caring for uninsured patients who have the virus, along with costs such as building temporary facilities to expand bed capacity. The Secretary has broad authority to establish the terms for allocating the available funds.

Strategic National Stockpile. This existing program purchases supplies and equipment for use during public health emergencies. Its limited inventory is expected to be rapidly depleted during the pandemic. The bill provides an additional $16 billion to be used to purchase critical supplies such as personal protective equipment (PPE) and ventilators for distribution to facilities taking care of COVID-19 patients. The first emergency bill provided $1 billion for the stockpile, so the combined effort now stands at $17 billion.

Vaccines, Therapeutics, and Testing. The bill provides $11 billion to accelerate the production and procurement of vaccines, therapies, and tests related to the pandemic.  This funding is in addition to a large investment from the first emergency bill.

State and Local Preparedness. The Centers for Disease Control and Prevention (CDC) coordinates public health responses with state and local governments. The bill provides $1.5 billion to increase the capacity of this network to implement measures to suppress and mitigate the spread of the virus. When combined with the first emergency bill, Congress has provided $2.5 billion for these efforts.

NIH Research. The National Institutes of Health (NIH) will play a critical role in researching the nature of the virus and the therapies and vaccines that could shorten the pandemic and reduce the numbers of patients who become very sick. The bill provides $0.9 billion for this research. When combined with the first bill, the total stands at $1.8 billion.

No Cost-Sharing for COVID-19 Testing and Vaccines. Insurers are required to cover testing for COVID-19 without cost-sharing to their enrollees, and must pay for the tests based on contracts or the posted pricing of the labs. Further, insurance must cover any approved vaccine (with an “A” or “B” rating) at no cost to plan enrollees. Medicare beneficiaries also would pay no cost-sharing for an approved vaccine.

Telehealth. Consumers could use their Health Savings Accounts (HSAs) to pay for telehealth services. Further, Medicare would begin paying for telehealth for all program beneficiaries during the course of the pandemic without restriction. This will allow Medicare beneficiaries to get telehealth services from providers they had not previously seen for services. In addition, federally-qualified health centers (FQHCs) and rural health clinics will be allowed to bill for telehealth services provided to Medicare patients.

Cancellation of the Medicare Sequester Through December 2020. The 2 percent cut in Medicare payments to hospitals, physicians, and other providers would be cancelled for the rest of calendar year 2020. The cut, or sequester, was implemented pursuant to the 2011 Budget Control Act, and had previously been extended through fiscal year 2029. The emergency legislation would extend it by one year, through 2030, to offset the added expense of the cancellation in 2020.

Increase in Medicare Inpatient Rates. Medicare will increase payments to hospital caring for COVID-19 patients who are admitted for inpatient care by 20 percent for duration of the pandemic.

Three-Month Prescription Refills. Medicare beneficiaries will get the right to request 90 day supplies of prescription medications from their part D plans.

Health-Related “Extenders”. Numerous Medicare and Medicaid provisions scheduled to expire on May 22nd of this year, were extended through November 30th. Among the provisions that will be kept in force for several more months is the cancellation of Medicaid disproportionate share hospital (DSH) cuts that were originally enacted in the Affordable Care Act in 2010.

This summary is not exhaustive; it covers the legislation’s main provisions. Further, the legislation was assembled under extreme pressure, and is sure to include both mistakes and surprises.

It also may not be the last word from Congress on the pandemic. There is already talk of a fourth bill (and perhaps a fifth). Another round of legislating may commence near the end of April.

James C. Capretta is a columnist for State of Reform and holds the Milton Friedman Chair at the American Enterprise Institute.