Biden’s Health Priorities in the American Rescue Plan

On Thursday, March 11th, President Joe Biden signed the US bailout bill for $ 1.9 trillion [P.L. 117-2]. The US bailout was a top priority for the President and marks his first major legislative achievement of the 117th Congress. The package is one of the greatest economic relief bills in history. Last year, the federal government approved over $ 5 trillion to respond to the COVID-19 pandemic and provide economic assistance to individuals, businesses, state and local governments. Unlike previous bailout packages, which were the result of significant bipartisan negotiations, the US bailout plan was passed under the budget reconciliation process, which allowed it to be passed by simple majority in both the House and Senate.

The American Rescue Plan expands a number of federal COVID-19 pandemic programs, makes a number of changes to health programs, and provides billions in new funding to nearly every sector of the U.S. economy. The legislation is now in the implementation phase, with the von Biden government starting to distribute funds and issue guidance on how to implement the various provisions.

Below are the highlights of several key health care provisions of the American rescue plan:

Health promotion in rural areas

The law allows rural health care providers to spend an additional $ 8.5 billion in expenses and lost revenue attributable to the COVID-19 pandemic. Funds will be administered by the Department of Health and Human Services (HHS) in a manner similar to that previously provided by Congress to the Provider Relief Fund. The act also allocates $ 500 million to the U.S. Department of Agriculture (USDA) to set up a temporary rural development emergency program to help rural health care providers respond to COVID-19. Funding will be made available to help:

  1. Increase vaccine distribution capacities;

  2. Provision of medical care to increase medical care capacity;

  3. Reimbursement of lost revenue during the COVID-19 pandemic, including lost revenue that occurred before the grant was awarded;

  4. Enhance telemedicine skills, including underlying health information systems

  5. Build temporary or permanent structures to provide health services, including vaccine administration or testing;

  6. Support staffing needs for vaccine administration or testing; and

  7. Engage in all other rural development support efforts vital to managing the COVID-19 pandemic, including the secretary-approved food aid for the vulnerable.

Medicaid coverage of vaccines and treatments

The law requires Medicaid programs to cover the cost of COVID-19 vaccines and treatments with no cost sharing from beneficiaries. The Federal Medical Assistance Percentage (FMAP) would also increase to 100 percent for vaccine delivery by one year after the end of the public health emergency (PHE). The law would also allow states to provide equal coverage to uninsured people. In addition, the law adds COVID-19 treatments to the Medicaid drug discount program and ends the cap on Medicaid drug discounts from 2024.

Medicaid extension

The law includes new incentives for states to expand their Medicaid programs in line with the original intent of the Affordable Care Act (ACA). There are currently 12 states that have not yet expanded their Medicaid programs. These non-enlargement states would be entitled to a 5 percent increase in the ACA’s enlargement FMAP for two years. The act also includes optional Medicaid enhancements for postpartum care, mobile crisis intervention programs, community-based services, and additional funding for the urban Indian and indigenous Hawaiian health systems.

Treatment of DSH funds during the PHE

The law changes the Family First Coronavirus Response Act [P.L. 116-127] To ensure that the total number of Disproportionate Share Hospital (DSH) payments a state can make during a fiscal year equals the total DSH payments the state could have made for such fiscal year without the increased FMAP.

Nursing home financing

The bill provides $ 250 million to fund strike teams in state-level care facilities and $ 200 million to support qualified care facilities with COVID-19 infection control.


The law made two changes to Medicare. First, the Centers for Medicare and Medicaid Services (CMS) can waive the need for emergency medical services to include transportation to a hospital. Second, CMS must restore the rural lower bound for the wage index used for hospitals in states with purely urban populations.

Private health insurance

The law provides for a 100 percent federal grant through September to offset the premium cost of COBRA coverage for unemployed Americans. To cover the cost, employers would be entitled to recoverable tax credits on their Medicare payroll taxes. The law also extends the Court of Auditors’ premium tax reductions and ensures that unemployed people are entitled to cost-sharing credits under the Court of Auditors.

Vaccines, tests and medical supplies

The bill grants the Centers for Disease Control and Prevention (CDC) $ 7.5 billion to distribute vaccines and an additional $ 5.2 billion to the Biomedical Advanced Research and Development Authority (BARDA) to procure vaccines and Accessories ready. The law provides about $ 50 billion to increase testing capacity and increase the use of improved genome sequencing. To address shortfalls in the medical supply chain, the federal government’s law also allows $ 10 billion to use the Defense Production Act (DPA) to expand domestic production of needed medical supplies and vaccines.

Supporting healthcare workers

The law aims to empower public health workers by providing $ 7.6 billion to meet COVID-19 response needs. The law also provides $ 7.6 billion for community health centers, $ 800 million for the National Health Service Corps, $ 200 million for the Nurse Corps, and $ 330 million for health center training.

Federal, state and municipal aid

The law provides over $ 350 billion for state, local, tribal, and territorial governments to respond to the COVID-19 pandemic. Funds can be used for a variety of programs, including household, small business, nonprofit assistance, and award or key employee benefits. The funds will also be available to provide government services hit by revenue cuts and allow states and local governments to invest in investment projects, including expanding broadband infrastructure.

The act also provides the Federal Emergency Management Agency (FEMA) Disaster Relief Fund with an additional $ 50 billion to respond to the COVID-19 pandemic and other major disasters. FEMA is a leading federal agency working with state and local governments to administer and distribute COVID-19 vaccines.

© Polsinelli PC, Polsinelli LLP in CaliforniaNational Law Review, Volume XI, Number 162

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