Policy Playbook: American Rescue Plan Act of 2021
- Mar 25th, 2021
- Alex Bonilla
Authors: Alex Bonilla, MD (Emergency Medicine Resident, Icahn School of Medicine at Mount Sinai) and Summer Chavez, DO, MPH, MPM (Attending Physician, The University of Texas Health Science Center at Houston) // Reviewed by: Alex Koyfman, MD (@EMHighAK) and Brit Long, MD (@long_brit)
What is the issue?
This month we cover the Biden Administration’s $1.9 trillion stimulus package known as the American Rescue Plan Act of 2021. This stimulus package continues to build on prior legislation, which we have discussed here, here and here. In short, the American Rescue Plan Act of 2021 includes provisions to help individuals, government and health care institutions deal with the burden of the COVID-19 pandemic.1,2,3
- $422 billion for stimulus checks – Up to $1400 for adults and dependents. Starts phasing out at $75K for those filing single, $112.5K for head of households and $150K for joint filers.
- $246 billion for supplemental unemployment insurance – $300 per week in supplemental unemployment insurance until September 2021.
- Expands full value of the Child Tax Credit for low-income households and increases credit for 2021 ($3K per child or $3.6K per child under age 6) – to be administered monthly.
- Raises maximum Earned Income Tax Credit to $1500 for childless low-income adults for 2021.
- COBRA coverage credit (see more below),
Provisions for Institutions1,6
- Additional $7.25 billion for the Paycheck protection program.
- $170 billion for the safe reopening of schools, colleges and universities.
- $350 billion for state, local territorial and tribal governments.
- $3.7 billion for the Indian Health Service, Medical Reserve Corps, National Health Service Corps, Nurse Corps and teaching health centers participating in GME.
COVID Vaccines and Testing1,6,7
- $20 billion for creation of a national COVID-19 vaccination program – guaranteed access to all individuals at no cost.
- $50 billion for a national testing strategy – scales up testing and tracing and addresses supply chain issues.
- $6 billion for research, development, manufacturing, production and procurement of vaccines and therapeutics.
- $10 billion for domestic manufacturing of pandemic supplies (e.g PPE, meds, diagnostics) under the Defense Production Act.
COVID Prevention and Mitigation1,4,6,7
- Expands public health workforce to work in vaccine outreach and contact tracing and long term will work to improve outcomes in low-income and underserved communities.
- Funds to increase sequencing, surveillance and outbreak analytics capacity to track outbreaks, generate treatments and vaccines.
- $900 million to assist Skilled Nursing Facilities with prevention of COVID-19, development of COVID-19 prevention protocols and addressing outbreaks with strike teams.
- $8.5 million for rural health care to support COVID-19 pandemic related expenses and losses. Additional $500 million for rural health care grants.
- $30 billion for Disaster Relief Fund to ensure sufficient supplies and protective gear.
- Provisions for addressing health disparities – expands Community Health Centers and funds health services on Tribal lands and testing/vaccination for incarcerated individuals.
Health Care Coverage6,8,9
- Provides federal subsidies covering 100% of premiums for eligible individuals and families to remain on their employer-based coverage (COBRA), available until 9/30/2021. Notably, the subsidy will not count towards gross income, but will be treated as an advance refundable payroll tax credit.
- Expands ACA Marketplace subsidies to increase healthcare coverage for lower- and middle-income individuals and families and modernizes state-based marketplaces for 2021 and 2022–changes are expected to extend coverage to approximately 2.5 million uninsured individuals.
- Eliminates the subsidy cliff by expanding premium tax credits (PTC) to eligible individuals with income above 400% of FPL and premiums currently exceeding 8.5% of overall household income. Hence, about 40% of new enrollees will be eligible as a result of this expansion
- Expands subsidies for individuals already eligible for PTCs such that individuals will make smaller premium contributions. Premium contributions are dependent on income, but capped at 8.5% of income for higher income individuals.
- Individuals who receive unemployment benefits are also eligible for maximal subsidies.
- Temporarily protects marketplace enrollees who receive PTCs in advance from having to pay back any excess subsidies if their actual income is higher than initially predicted.
- For 7 years, states will have the option to extend Medicaid and Children’s Health Insurance Program (CHIP) eligibility to women for 12 months postpartum.
- Incentivizes states that have not expanded Medicaid (currently 12 states) to expand by temporarily increasing the state’s Federal Medical Assistance Percentage (FMAP) for the base program by 5% for two years.
- This is in addition to 6.2% FMAP increase provided under the Families First Coronavirus Response Act.
- States will still receive a 90% federal matching rate (FMAP) for adults covered through the ACA expansion.
- Incentive is estimated to tremendously offset costs of expansion and would increase coverage to 12 million uninsured individuals if all 12 states expanded.
- 2% Medicare sequestration cuts will resume April 1, 2021 – moratorium from the Consolidated Appropriations Act will not be extended past March 31, 2021 by American Rescue Plan Act.
- Requires Medicaid and CHIP to cover cost of COVID-19 vaccines and treatment by expanding Federal Medicaid Assistance Percentage (FMAP) to 100%.
- Provides option for states to provide coverage to uninsured individuals for COVID-19 vaccine and treatment at 100% FMAP.
- Over $3.5 billion for addressing mental health, substance use disorders, development of a mobile crisis service program and pediatric mental health services.
Why does this matter?
The American Rescue Plan Act of 2021 includes provisions for a multipronged approach to addressing consequences of the COVID pandemic and builds upon the framework established by President Biden’s Executive Orders previously discussed here.
The U.S. economy contracted for the first time since the Great Recession as a result of the pandemic, experiencing a 3.5% decrease in GDP in 2020, and along with that, increased unemployment and decreased consumer spending.10 Although there have been signs of an economic recovery, direct economic relief and leveraging the tax system will be critical for supporting eligible individuals and the overall recovery of the US economy.11-14 The additional round of stimulus checks, prolonging unemployment insurance, expansion of the Child Tax Credit for low income households and maximizing the Earned Income Tax Credit for childless adults has the potential to benefit households in greatest need.5
Vaccine scarcity and logistical challenges contributed to a slow vaccine rollout in the US.15 Vaccination rates remain at 12.3% and there is already evidence suggesting lagging vaccine rates in underserved communities, which have been disproportionately impacted by the pandemic.16,17 The influx of funding will serve to establish a more robust vaccination program consisting of community vaccination sites, mobile vaccination units and guaranteed access at no cost to all individuals regardless of immigration status. Part of this vaccination effort includes particular attention to the underserved communities most impacted by the pandemic, such as Black, Latino, rural, nursing home and incarcerated populations.
These initiatives are important for controlling the pandemic now, however, fortifying the American public health and surveillance infrastructure and expanding health care access will be as important for ensuring the overall health of American communities. The temporary ACA Marketplace subsidy expansions and Medicaid expansion incentives have the potential to increase coverage for approximately 14.5 million uninsured individuals.6,8,9 Although these provisions are only temporary, they do offer a blueprint and validation for more permanent legislation in the coming years. States will also have the option to extend the postpartum coverage period under Medicaid or CHIP to a full year following pregnancy.18 This will be an important step towards expanding coverage to mothers who may fall into the coverage gap, ensuring continuity of care and addressing the rising maternal mortality rate.18 Lastly, provisions for mental health and substance use disorder interventions come at a critical time to address the mental health burden exacerbated by the pandemic.19,20
What can I do about it?
- Educate patients and colleagues about potential provisions they may benefit from.
- Educate patients about vaccine benefits and eligibility.
- Determine if your institution qualifies for funding from the Paycheck Protection Program.
- Engage with legislators to advocate for policies that benefit patients and health care system.
Helpful resources and links
This post was a collaboration between emDocs and the EMRA Health Policy Committee.
- American Rescue Plan Act of 2021. H.R. 1319. 117th Congress (2021). Accessed March 7, 2021.https://www.congress.gov/bill/117th-congress/house-bill/1319/text.
- President Biden Announces American Rescue Plan. The White House. January 20, 2021. Accessed March 19, 2021. https://www.whitehouse.gov/briefing-room/legislation/2021/01/20/president-biden-announces-american-rescue-plan/
- Senate Approves $1.9 Trillion COVID-19 Relief Reconciliation Bill with Provisions Affecting Hospitals and health Systems. American Hospital Association. March 6, 2021. Accessed March 7, 2021. https://www.aha.org/system/files/media/file/2021/03/AHASBonSenatePassageofCOVID19Bill-030621-final.pdf
- Watson G, York E. The American Rescue Plan Act Greatly Expands Benefits through the Tax Code in 2021. March 12, 2021. Accessed March 19, 2021. https://taxfoundation.org/american-rescue-plan-covid-relief/
- Marr C, Cox K, Hingten S, Windham K, Sherman A. American Rescue Plan Act Includes Critical Expansions of Child Tax Credit and EITC. Center on Budget and Policy Priorities. March 12, 2021. Accessed March 19, 2021. https://www.cbpp.org/research/federal-tax/american-rescue-plan-act-includes-critical-expansions-of-child-tax-credit-and
- Summary of American Rescue Plan Act of 2021 and Provisions Affecting Hospitals and Health Systems. American Hospital Association. March 17, 2021. Accessed March 19, 2021. https://www.aha.org/system/files/media/file/2021/03/AHALegislativeAdvisory-AmericanRescuePlan-031721.pdf
- Kates J. What’s in the American Rescue Plan for COVID-19 Vaccine and Other Public health Efforts? Kaiser Family Foundation. March 16, 2021. Accessed March 19, 2021. https://www.kff.org/policy-watch/whats-in-the-american-rescue-plan-for-covid-19-vaccine-and-other-public-health-efforts/
- Keith K. Final Coverage Provisions In the American Rescue Plan and What Comes Next. Health Affairs. March 11, 2021. Accessed March 19, 2021. https://www.healthaffairs.org/do/10.1377/hblog20210311.725837/full/
- Rudowitz R, Corallo B, Garfield R. New Incentive for States to Adopt the ACA Medicaid Expansion: Implications for State Spending. Kaiser Family Foundation. March 17, 2021. Accessed March 19, 2021. https://www.kff.org/coronavirus-covid-19/issue-brief/new-incentive-for-states-to-adopt-the-aca-medicaid-expansion-implications-for-state-spending/
- Mutikani L. COVID-19 savages US economy, 2020 performance worst in 74 years. Reuters. January 28, 2021. Accessed March 7, 2021. https://www.reuters.com/article/us-usa-economy/covid-19-savages-u-s-economy-2020-performance-worst-in-74-years-idUSKBN29X0I8.
- Rouse, C. The Employment Situation in February. The White House. March 5, 2021. Accessed March 7, 2021. https://www.whitehouse.gov/briefing-room/blog/2021/03/05/the-employment-situation-in-february/#:~:text=The%20unemployment%20rate%20ticked%20down,out%20of%20the%20labor%20force.
- States Are Using Much-Needed Temporary Flexibility in SNAP to Respond to COVID-19 Challenges. Center on Budget and Policy priorities. Accessed March 7, 2021.https://www.cbpp.org/research/food-assistance/states-are-using-much-needed-temporary-flexibility-in-snap-to-respond-to.
- Cox, J. Retail sales burst higher in January as consumer use stimulus checks to spend heavily. CNBC. February 17, 2021. Accessed March 7, 2021 https://www.cnbc.com/2021/02/17/us-retail-sales-january-2021.html.
- Treisman R. California Program Giving $500 No-Strings-Attached Stipends Pays Off, Study Finds. National Public Radio. March 4, 2021. Accessed March 7, 2021.https://www.npr.org/2021/03/04/973653719/california-program-giving-500-no-strings-attached-stipends-pays-off-study-finds.
- Cruickshank S. Making Sense of The Lagging US COVID-19 Vaccination Effort. The Hub. January 8, 2021. Accessed March 7, 2021. https://hub.jhu.edu/2021/01/08/tinglong-dai-stalled-vaccination-rates-covid-19/.
- Huang P, Carlsen A. How Is The COVID-19 Vaccination Campaign Going In Your State? National Public Radio. March 7, 2021. Accessed March 19, 2021. https://www.npr.org/sections/health-shots/2021/01/28/960901166/how-is-the-covid-19-vaccination-campaign-going-in-your-state.
- Ndugga N, Pham O, Hill L, Artiga S. Latest Data on COVID-19 Vaccination Race/Ethnicity. Kaiser Family Foundation. March 3, 2021.Accessed March 7, 2021. https://www.kff.org/coronavirus-covid-19/issue-brief/latest-data-on-covid-19-vaccinations-race-ethnicity/.
- Ranji U, Salganicoff A, Gomez I. Postpartum Coverage Extension in the American Rescue Plan Act of 2021. Kaiser Family Foundation. March 18, 2021. Accessed March 19, 2021. https://www.kff.org/policy-watch/postpartum-coverage-extension-in-the-american-rescue-plan-act-of-2021/
- Panchal N, Kamal R, Cox C, Garfield R. The Implications of COVID-19 for Mental health and Substance Use. Kaiser Family Foundation. February 10, 2021. Accessed March 7, 2021. https://www.kff.org/coronavirus-covid-19/issue-brief/the-implications-of-covid-19-for-mental-health-and-substance-use/
- Abbott A. COVID’s mental-health tolls: how scientists are tracking surge in depression. Nature News. February 3, 2021. Accessed March 7, 2021. https://www.nature.com/articles/d41586-021-00175-z