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March 26, 2020

Senate passes $2T stimulus package, as unemployment claims hit all-time high

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    The Senate on Wednesday voted 96-0 to unanimously pass a $2 trillion economic stimulus package that includes $150 billion for hospitals and medical workers, direct payments for Americans, and funding for businesses—but some stakeholders are concerned the funding boosts won't be enough to adequately help the United States get through the coronavirus epidemic.

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    The Senate passed the measure as the number of reported cases of COVID-19, the disease caused by the new coronavirus, increased tenfold in the United States within one week, as more Americans are getting tested for the disease. As of Thursday morning, state and federal officials had reported 68,534 cases of COVID-19 and 990 deaths linked to the new coronavirus in the United States.

    The new coronavirus' spread in the United States and throughout the world has had severe economic effects, causing volatility in global stock markets and several countries to shut down businesses and implement strict lockdowns aimed at containing the virus' spread. In the United States, many states and localities have ordered bars and dining establishments to restrict their services to carry-out and delivery and have ordered entertainment, recreational, and retail facilities to close down completely. Several states have ordered all non-essential businesses to close.

    On Thursday, the Department of Labor announced that U.S. unemployment claims reached a record high of 3.28 million last week, up from 282,000 the week prior.

    Senate passes $2T coronavirus relief package

    In response, the Trump administration and federal lawmakers so far have enacted two legislative packages aimed at stimulating the United States' economy and protecting workers from income and job losses related to the country's coronavirus epidemic. The $2 trillion legislative package that the Senate passed on Wednesday is intended to serve as a third step in policymakers' coronavirus relief efforts and came after five days of intense negotiations between the White House, Senate Majority Leader Mitch McConnell (R-Ky.), and Senate Minority Leader Chuck Schumer (D-N.Y.).

    The economic package is unprecedented in size and scope, and includes funding for health care providers and initiatives, businesses, and payments that would go directly to Americans.

    Health care provisions

    The legislative package includes a total of $150 billion to help support hospitals' and medical workers' efforts to treat COVID-19 patients. For example, the bill would allocate $100 billion to the Public Health and Social Services Emergency Fund, which would be available to eligible health care providers for expenses or lost revenue associated with the epidemic. Eligible providers include: suppliers or providers enrolled in Medicare or Medicaid, public entities, for-profit entities, and nonprofit entities in the United States that provide testing, diagnoses, or care for individuals with possible or confirmed cases of COVID-19.

    In addition, the package would provide $1.32 billion in supplemental funding for community health centers for prevention, diagnostic, and treatment efforts related to COVID-19; create a 20% add-on payment for hospitals treating inpatients with COVID-19; and allow the HHS secretary to create and implement a new payment regulation for rural and federally qualified health centers that provide telehealth services to certain patients.

    Further, the proposal would suspend Medicare sequester cuts from May 1 to Dec. 31, though it calls for extending the sequester cuts for a year past their current end date. The measure also would extend through Nov. 30 funding for certain Medicare programs that are set to expire on May 22 and delay through Nov. 30 cuts to Medicaid disproportionate-share hospital payments that are scheduled to take effect May 22.

    In addition, the proposal includes provisions to:

    • Bolster the United States' stockpiles of medical supplies and personal protective equipment;
    • Encourage the development of new vaccines and treatments for the disease;
    • Increase the health care workforce;
    • Loosen certain telehealth restrictions;
    • Prevent drug and medical device shortages; and
    • Require that insurers cover testing, treatment, and potential vaccines for COVID-19.

    Economic stimulus proposals

    The proposal includes $290 billion for the federal government to provide direct payments to eligible Americans. The proposal would enable the federal government to provide direct payments of $1,200 to individual Americans with annual incomes of $75,000 or less and $2,400 for eligible married couples with a combined annual income of $150,000 or less. The government also would provide qualifying Americans with direct payments of $500 for each of their children. The federal government would base the payments on the income levels, marital status, and number of children reported in Americans' 2018 or 2019 tax filings.

    The federal government also would provide direct payments to individuals and married couples with annual incomes above the $75,000 and $150,000 thresholds, but those payments would be reduced by $5 for every $100 in income above the threshold. That means an individual with an annual income of $99,000 or more and married couples with a combined annual income of $198,000 or more would not qualify for any payments.

    In addition, the legislative package includes at least $370 billion for zero-interest loans to help small businesses. Under the measure, some of the loans would convert to grants if small businesses use the funding to avoid layoffs and instead pay workers' salaries, rent, utilities, health insurance premiums, or other necessities or worker protections while employees remain at home. The bill also would allocate $504 billion in funding to make loan guarantees or investments available to businesses, states, and localities. The legislative package also includes an additional $150 billion in state and local stimulus funds.

    The proposal also includes $25 billion in funding for food-assistance programs, as well as $260 billion to extend unemployment insurance by 13 weeks and offer additional assistance to workers furloughed because of the epidemic for four months. Affected workers could receive the amount their respective states typically provide for unemployment plus $600 per week. Under the measure, gig workers, such as Uber drivers, and freelancers for the first time would be eligible for unemployment.

    Next steps

    The bill now heads to the House, and House Majority Leader Nancy Pelosi (D-Calif.) has indicated that she intends to bring the measure up for a vote, despite releasing her own economic stimulus bill earlier this week. Pelosi has said she'd like the House to vote on the bill either by voice vote or under the House's unanimous consent procedure.

    According to CNBC, House Majority Whip Steny Hoyer (D-Md.) in a letter sent to House lawmakers on Wednesday wrote that the chamber will convene at 9 a.m. EST on Friday to consider the bill, and that House leaders expect to call for a voice vote on the measure.

    Department of Treasury Secretary Steven Mnuchin has said President Trump will sign the measure if Congress approves it as it is currently written.

    Some say bill doesn't go far enough

    While stakeholders and experts largely praised the bill's goals, some have raised concerns that the bill might not provide enough funding to help the United States weather the impact the epidemic will have on the country's economy and health care system.

    For instance, the American Hospital Association (AHA) on Wednesday said it supports the legislative package and called for its passage, but said hospitals likely will need additional relief. AHA President Rick Pollack in a statement said, "This bill includes important provisions that will help us respond, including the creation of an emergency fund grant program, additional support for taking care of COVID-19 patients, and relief from spending cuts, among other provisions." However, he added, "While this legislation is an important first step forward, more will need to be done to deal with the unprecedented challenge of this virus."

    Similarly, American Medical Association President Patrice Harris in a statement said, "[W]e appreciate that the legislation attempts to increase access to personal protective equipment for physicians and other health professionals on the front lines of care—though supply issues remain."

    In addition, some experts have noted that the legislative package is aimed more at addressing economic hardships occurring right now than it is at stimulating the economy, Axios reports.

    Jonathan Parker, a professor of finance at the Massachusetts Institute of Technology, told Axios, "This should not be thought of as a stimulus bill—this should be thought of as social insurance in a disaster state of the world for the most hard hit." He explained, "The idea is to freeze time for a month or six weeks and let people emerge with not a huge amount of debt—not starving, not being evicted." As such, the effort would generate "a V-shaped recovery where people find themselves roughly where they were when we went in," he said (Pramuk, CNBC, 3/26; Smith et al., New York Times, 3/26; Owens, "Vitals," Axios, 3/26; Cohrs, Modern Healthcare, 3/25; Clason et al., Roll Call, 3/25; King, FierceHealthcare, 3/25; Winfield Cunningham, "PowerPost," Washington Post, 3/25; Stein, Washington Post, 3/26; Emma/Scholtes, Politico, 3/26; Rabouin, Axios, 3/26; Cox, CNBC, 3/26).

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