American Rescue Plan Act of 2021 (H.R. 1319)

Congress is working on Phase 5 of coronavirus relief using the budget reconciliation process. As described by the House Committee on the Budget, “Budget reconciliation provides a fast-track process for consideration of bills to implement the policy choices embodied in the annual congressional budget resolution.”[1] Just like with the budget resolution, reconciliation bills are not subject to filibuster, and only need a simple majority. However, a reconciliation bill’s provisions are limited to those that directly affect spending, revenue, and deficits.

On February 5, 2021, the Senate and House passed identical budget resolutions for fiscal year 2021 that include “reconciliation instructions,” which direct committees to reconcile spending, revenues, and deficits with the resolution.[2] The House passed their reconciliation bill (H.R. 1319) on February 27, 2021 and the Senate Majority Leader stated that he expects the Senate to pass its bill before March 14, 2021.[3] The estimated budget effects of H.R 1319 is $1.9 trillion dollars from 2021 to 2030.[4]

Overall Summary

Specifically, the bill provides funding for:

agriculture and nutrition programs, including the Supplemental Nutrition Assistance Program (SNAP);
schools and institutions of higher education;
childcare and programs for older Americans and their families;
COVID-19 vaccinations, testing, treatment, and prevention;
mental health and substance-use disorder services;
emergency rental assistance, homeowner assistance, and other housing programs;
payments to state, local, tribal, and territorial governments for economic relief;
multiemployer pension plans;
small business assistance, including specific programs for restaurants and live venues; and
programs for health care workers, federal employees, veterans, and other targeted populations.

The bill also includes provisions that:

raise the federal minimum wage to $15 an hour by 2025 (see note);[5]
extend unemployment benefits and related services;
provide a maximum recovery rebate of $1,400 per eligible individual;
expand and/or modify certain tax credits, including the child tax credit and the earned income tax credit;
provide premium assistance for certain health insurance coverage; and
require coverage, without cost-sharing, of COVID-19 vaccines and treatment under Medicaid and CHIP.

Healthcare Summary

Though not specifically focused on healthcare, H.R. 1319 does include some healthcare provisions:

reduces health care premiums for low- and middle-income families by increasing the Affordable Care Act’s (ACA) premium tax credits for 2021 and 2022 (+$45 billion);
provides COBRA subsidies so workers who have been laid off or had their hours reduced are eligible, and creates health care subsidies for unemployed workers who are ineligible for COBRA (+$18 billion);
increases Medicaid payments to states that newly expand Medicaid under the ACA (+$16 billion);
allows states to expand Medicaid coverage for prisoners close to release and for pregnant and postpartum women for 5 years (+$9 billion);
increases funding for testing and contact tracing (+$50 billion);
increases public health workforce and other investments (+$19 billion);
funds vaccine distribution, confidence, and supply chains (+$16 billion);
removes cap that limits how much drug manufacturers must rebate to Medicaid for drugs that have increased quickly in price (-$18 billion); and
includes other healthcare provisions as described below.

Specific healthcare funding and other Provisions

Committee on Education and Labor (Title II)

COBRA Continuation Coverage [Section 2401] – provides subsidies to support workers who are eligible for continuation coverage under the Consolidated Omnibus Reconciliation Act of 1985 (COBRA) due to involuntary termination or reduction in hours. Provides a refundable payroll tax credit to allow employers and health plans to be reimbursed for the full amount of COBRA premiums.

Committee on Education and Labor (Title III)

Subtitle A – Public Health

Chapter 1 – Vaccines and Therapeutics

Funding for COVID-19 Vaccine Activities at the CDC [Section 3001] – provides $7.5 billion in funding for CDC to support activities to prepare, promote, distribute, administer, monitor, and track COVID-19 vaccines.
Funding for Vaccine Confidence Activities [Section 3002] – provides $1 billion in funding for CDC to strengthen vaccine confidence in the United States, provide further information and education with respect to authorized or licensed vaccines, and improve vaccination rates.
Funding for Supply Chain for COVID-19 Vaccines, Therapeutics, and Supplies [Section 3003] – provides $5.2 billion in funding to HHS to support research, development, manufacturing, production, and purchase of vaccines, therapeutics, and ancillary medical products and supplies for SARS-CoV-2, or any viral variant mutating therefrom, and COVID-19 or any disease with potential for creating a pandemic.
Funding for COVID-19 Vaccine, Therapeutic, and Device Activities at the FDA [Section 3004] – provides $500 million in funding to the FDA for the evaluation of the continued performance, safety, and effectiveness of COVID-19 vaccines, therapeutics, and diagnostics; invest in advanced continuous manufacturing activities related to the production of vaccines and related materials; conduct inspections; review of devices authorized for COVID-19; and supply chain oversight including to mitigate shortages.

Chapter 2 – Testing

Funding for COVID-19 Testing, Contact Tracing, and Mitigation Activities [Section 3011] – provides $46 billion in funding to HHS to detect, diagnose, trace, monitor and mitigate COVID-19 infections.
Funding for SARS-COV-2 Genomic Sequencing and Surveillance [Section 3012] – provides $1.75 billion to CDC for activities related to genomic sequencing and analytics, & diseases surveillance.
Funding for Global Health [Section 3013] – provides $750 million to CDC to combat COVID-19 and other emerging infectious disease threats globally, including efforts related to global health security, global disease detection and response, global health protection, global immunization, and global coordination.
Funding for Data Modernization and Forecasting Center [Section 3014] – provides $500 million to CDC to support health data surveillance and analytics modernization initiatives and to establish, expand, and maintain efforts to modernize the U.S. disease warning system to forecast and track hotspots for COVID-19.

Chapter 3 – Public Health Workforce

Funding for Public Health Workforce [Section 3021] – provides $7.66 billion to HHS to establish, expand, and sustain a public health workforce, including awards to State, local, and territorial public health departments.
Funding for Medical Reserve Corps [Section 3022] – provides $100 million to the Medical Reserve Corps.

Chapter 4 – Public Health investments

Funding for Community Health Centers and Community Care [Section 3031] – provides $7.6 billion in funding to HHS to support COVID-19 response at community health centers.
Funding for National Health Service Corps [Section 3032] – provides $800 million in funding for the National Health Service Corps.
Funding for Nurse Corps [Section 3033] – provides $200 million in funding to support the Nurse Corps Loan Repayment Program.
Funding for Teaching Health Centers that Operate Graduate Medical Education [Section 3034] – provides $330 million to remain available until September 30, 2023 for Teaching Health Centers (THC) Graduate Medical Education (GME) sites nationwide. Such funds shall be used for making payments to new approved residency training programs, increasing the per resident allocation of existing and new THC GME providers, restoring the number of full-time equivalent residents in existing programs to at least the numbers between fiscal years 2016-2018, expanding existing approved graduate medical residency programs, establishing new accredited or expanded primary care residency programs, and covering administrative costs.
Funding for COVID-19 Testing, Contact Tracing, & Mitigation in Congregate Settings [Section 3035] – provides $1.8 billion to carry out activities to detect, diagnose, trace, monitor, and report on SARS-CoV-2 and COVID-19 infections and related strategies to mitigate the spread of SARS-CoV-2, in congregate settings.

Chapters 5 and 6 are related to Indian Health and Mental Health and Substance Abuse Disorders

Chapter 7 – Exchange Grant Program

Establishing a Grant Program for Exchange Modernization [Section 3061] – provides $20 million to HHS to award grants to State-Based Marketplaces (SBMs) to modernize systems, programs, and/or technologies.

Subtitle B – Medicaid

Mandatory Coverage of COVID-19 Vaccines and Administration and Treatment [Section 3101] – requires Medicaid coverage of COVID-19 vaccines and treatment without beneficiary cost sharing with coverage and administration of vaccines matched at a 100 percent FMAP through one year after the end of the PHE. It also gives states the option to provide coverage to the uninsured for COVID-19 vaccines and treatment without cost sharing through the PHE, with vaccines matched at 100 percent FMAP.
Modifications to Certain Coverage Under Medicaid for Pregnant and Postpartum Women [Section 3102] – allows states, for five years, to extend Medicaid eligibility to women for 12 months postpartum.
Allowing Medical Assistance Under Medicaid for Inmates During 30-Day Period Preceding Release [Section 3103] – provides Medicaid eligibility, for five years, to incarcerated individuals 30 days prior to release.
Enhanced Medicaid Support for Bundled Community-Based Mobile Crisis Intervention Services [Section 3104] – provides an enhanced FMAP for state Medicaid programs to cover mobile crisis intervention services for individuals experiencing a mental health or substance use disorder crisis.
Temporary Increase in FMAP for Medical Assistance Under State Medicaid Plans Which Begin to Expend Amounts for Certain Mandatory Individuals [Section 3105] – temporarily increases a state’s base FMAP by five percentage points for two years for states that newly expand Medicaid.
Extension of 100 Percent FMAP to Urban Indian Health Organizations and Native Hawaiian Health Care Systems [Section 3106] – provides 100 percent FMAP for services provided to Medicaid beneficiaries receiving care through Urban Indian Organizations and Native Hawaiian Health Centers for two years.
Sunset of Limit on Maximum Rebate Amount for Single Source Drugs and Innovator Multiple Source Drugs [Section 3107] – eliminates the cap on Medicaid drug rebates, starting in calendar year 2023.
Additional Support for Medicaid Home & Community-Based Services During COVID-19 [Section 3108] – provides a temporary FMAP increase of 7.35 percentage points for states to improve HCBS.
Funding for State Strike Teams for Resident & Employee Safety in Nursing Facilities [Section 3109] – provides $250 million to HHS for allocation to states in order to establish strike teams for nursing facilities with diagnosed or suspected cases of COVID-19 among residents.

Subtitle C – Children’s Health Insurance Program (CHIP)

Mandatory Coverage of COVID-19 Vaccines and Administration and Treatment [Section 3201] – requires CHIP coverage of COVID-19 vaccines and treatment without beneficiary cost sharing with the vaccines and the administration of vaccines matched at a 100 percent FMAP through one year after the end of the PHE.
Modifications to Certain Coverage Under CHIP for Pregnant and Postpartum Women [Section 3202] – allows states, for five years, to extend CHIP eligibility to women for 12 months postpartum.

Committee on Ways and Means (Title IX)

Subtitle E – Support to Skilled Nursing Facilities in Response to COVID-19

Providing for Infection Control Support to Skilled Nursing Facilities Through Quality Improvement Organizations [Section 9401] – provides direct appropriations of $200 million to HHS for the purpose of carrying out infection control support related to COVID-19 in skilled nursing facilities through QIOs.
Funding for Strike Teams for Resident and Employee Safety in Skilled Nursing Facilities [Section 9402] – provides $250 million to HHS for the purpose of allocating money to the states, District of Columbia, and U.S. territories to establish strike teams to respond to COVID-19 outbreaks in skilled nursing facilities.

Subtitle F – Preserving Health Benefits for Workers

Preserving Health Benefits for Workers [Section 9501] – provides for premium assistance of 85 percent for COBRA continuation coverage for eligible individuals and families from the first of the month after enactment through September 31, 2021. This section provides a refundable payroll tax credit to reimburse employers and plans who paid the subsidized portion of the premium to COBRA assistance eligible individuals; specifies penalties associated with failure to notify employees and plans of cessation of eligibility for premium assistance; and excludes premium assistance from income.

Subtitle G – Promoting Economic Security

Part 7 – Premium Tax Credit

Improving Affordability by Expanding Premium Assistance for Consumers [Section 9661] – modifies the affordability percentages used for 36 (B) premium tax credits for 2021 and 2022 to increase credits for individuals eligible for assistance under current law and provides 36 (B) credits for taxpayers with income below 400 percent of the federal poverty line (FPL).
Temporary Modification of Limitations on Reconciliation of Tax Credits for Coverage Under a Qualified Health Plan with Advance Payments of Such Credit [Section 9662] – for tax year 2020, modifies the repayment obligations for taxpayers receiving excess premium tax credits under Section 36 (B) so such payments are not subject to recapture.
Application of Premium Tax Credit in Case of Individuals Receiving Unemployment Compensation During 2021 [Section 9663] – for 2021, provides advanced premium tax credits as if the taxpayer’s income was no higher than 133 percent of FPL for individuals receiving unemployment compensation as defined in section 85(B) of Internal Revenue Code.

[1] For basics on reconciliation process: https://budget.house.gov/publications/fact-sheet/budget-reconciliation-basics

[2] H.Res.166: https://www.congress.gov/bill/117th-congress/house-resolution/166/text

S.Con.Res.5: https://www.congress.gov/bill/117th-congress/senate-concurrent-resolution/5

[3] https://www.congress.gov/bill/117th-congress/house-bill/1319

[4] https://www.cbo.gov/system/files/2021-02/Estimated_Budget_Effects_of_the_American_Rescue_Plan_Act_of_2021_0.pdf

[5] This provision passed the House, but the Senate Parliamentarian ruled on Feb 25, 2021 that it could not be included in the Senate bill.