Bookmark and Share

January 2009

Federal Corner: A New Administration and Much Work Ahead

After the groundbreaking inauguration of Barack Obama, all eyes are on how the new administration will move forward swiftly to address the many issues on its agenda.  According to Congressional Quarterly, Congress will have little time to focus on President Obama’s priorities until an economic stimulus package and the fiscal 2009 spending bills are complete. Congress is concentrating on a deadline of February 13 (the President’s Day recess) to complete the economic stimulus package, including new spending and tax cuts.

The House Democrats unveiled their $825 billion stimulus proposal, The American Recovery and Reinvestment Act of 2009, which is broad in scope. House Republicans, however, are concerned with the proposal, stating that it is ‘too wasteful and too slow to help the economy in 2009.[1]

With regard to health care, the Democrats’ proposal includes many provisions, including an emphasis on providing incentives for hospitals and individual providers to adopt electronic medical records:

  • Health Information Technology: $20 billion to promote efforts to computerize health records to cut costs and reduce medical errors.
  • Prevention and Wellness Fund: $3 billion to address preventable chronic diseases and infectious diseases.

To assist state Medicaid programs:

  • Medicaid Aid to States (Federal Medical Assistance Percentages - FMAP): $87 billion to states, increasing through FY 2010 the share of Medicaid costs the federal government reimburses all states by 4.8 percent. Additional relief would be tied to rates of unemployment.

Other provisions:

  • Healthcare Effectiveness Research: $1.1 billion for Healthcare Research and Quality programs to compare the effectiveness of different medical treatments funded by Medicare, Medicaid, and the State Children’s Health Insurance Program (SCHIP).
  • Community Health Centers: $1.5 billion, including $500 million to increase the number of uninsured Americans who receive healthcare and $1 billion to renovate clinics and make health information technology improvements.
  • Training Primary Care Providers: $600 million to address shortages and to train primary healthcare providers including doctors, dentists, and nurses as well as helping pay medical school expenses for students who agree to practice in underserved communities through the National Health Service Corps.
  • Indian Health Service Facilities: $550 million to modernize aging hospitals and health clinics and make healthcare technology upgrades to improve healthcare for underserved rural populations.

State Children’s Health Insurance Program (SCHIP)

The reauthorization and expansion of SCHIP is moving quickly. The House passed its proposal (H.R. 2) on Jan. 14, and the Senate Finance Committee approved a similar measure the following day. The House bill provides an additional $35 billion for the program over four and a half years, allowing coverage of an additional 4 million children, bringing the total expected enrollment to 11 million. The Senate version increases spending by $31.5 billion over this same period. It appears as though changes made in committee will increase the cost by several billion dollars.[2]

In general, the versions of the legislation are very similar, and include a tobacco tax increase of 61 cents to fund the majority of the program. Of note, both versions also include provisions to allow legal immigrants and new citizens into the program without the standard five-year waiting period.

[1] Epstein, E.  “House GOP Pushes Obama for Face-to-Face Meeting on Economic Stimulus.”
Congressional Quarterly, January 21, 2009.


[2] Armstrong, D. “Leaders Make  SCHIP Bill a Top Priority.” Congressional Quarterly, January 19, 2009.