Recovery Act Provides Important Health Care & Benefit Provisions

On February 17, 2009, President Barack Obama signed into law the American Recovery and Reinvestment Act of 2009 (PDF), Pub. L. No. 110-329. As the most ambitious economic stimulation effort in our nation’s history, the Recovery Act authorizes $789 billion in new federal spending to save or create 3.5 million jobs, help provide health coverage for people who have lost their jobs, protect some Medicaid beneficiaries from state cuts, reduce taxes for people with low- or moderate-incomes, invest in the nation’s infrastructure, and more. The law contains provisions relating to Medicare, Medicaid (Medi-Cal in California), the Administration on Aging (AoA), and Social Security, including a one-time payment of $250 to each of the more than 55 million beneficiaries receiving Social Security and/or Supplemental Security Income (SSI).

Below is a brief highlight of the Recovery Act’s provisions relating to these programs.

Extends the Qualified Individual (QI) program to December 31, 2010

The Medicare Improvements for Patients and Providers Act of 2008 – MIPPA – had extended it until December 31, 2009, and the Recovery Act extends it for another year. This program pays the Medicare Part B monthly premium for qualified beneficiaries with low-incomes and assets. Read more on the QI program.

Provides a 65% premium subsidy for the cost of health benefits through COBRA

COBRA, the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1986 (PDF), is the federal law that gives certain employees and their family members the right to continue their group health insurance when it would otherwise end (such as with job loss). Most people who choose to continue coverage under COBRA must pay the whole premium on their own plus a 2% administrative fee but, for many people, the premium is too expensive. The subsidy makes this health coverage more affordable for those who are involuntarily terminated.

An estimated 7 million people are eligible to receive this subsidy on their premiums for up to 9 months, including those who previously declined employer-provided coverage under COBRA. People who involuntarily lost or lose their jobs on or after September 1, 2008 through December 31, 2009 may qualify. See the Department of Labor’s website for more information on the COBRA subsidy.

Note: California’s legislature passed a bill (AB 23) that allows people who qualify for Cal-COBRA due to involuntary job loss to receive the federal premium subsidy as well. Cal-COBRA is a California law that provides protections similar to those in COBRA to employees of smaller firms (2-19 employees), their spouses, dependents and domestic partners.

Sends a one-time payment of $250 to people who receive Social Security benefits, Supplemental Security Income (SSI), Veterans Affairs or Railroad Retirement benefits

People must have been eligible for Social Security or SSI during the months of November 2008, December 2008 or January 2009 to receive this payment. No action is required to receive the payment and, those who receive Social Security or SSI benefits will receive it separately from their regular benefit checks. The Administration on Aging expects all payments to be delivered by late May 2009. People should not contact the Social Security Administration (SSA) unless they do not receive the check by June 4, 2009. Note: The VA and Railroad Retirement Board are responsible for paying people under their respective programs. If someone qualifies for more than program, for example receives Social Security and SSI or VA or RRB benefits, he or she will receive only one $250 payment.

This one-time payment will not count as income when determining eligibility for or the amount of benefits under any Federal or federally funded program, such as SSI, Medicaid (Medi-Cal in California), Medicare Part D’s Low-Income Subsidy, Food Stamps or housing assistance. Also, it does not count toward the resource limit for SSI or any other Federal or federally funded program for 9 months following the date of receipt.

For more information about the $250 one-time economic recovery payments, go to

Warning: Scam artists have started contacting beneficiaries about these Recovery Act payments. Social Security has received reports of scam artists attempting to use the Recovery Act to fraudulently obtain personal financial information. Similar to past scams, the caller often poses as an employee of a federal agency, typically SSA or IRS, and claims to need more information before the $250 payment can be issued. The scammer then tries to obtain the consumer’s Social Security Number, bank account data or credit card information. If successful, the financial damage can be quick and significant.

Please remind beneficiaries, as well as your friends and family members that neither Social Security nor the IRS is emailing or calling anyone regarding these $250 payments. Also remind them not to give out their Social Security number or personal bank account information over the phone. If you encounter any such scams, please report these cases to either: 1) your local Health Insurance Counseling & Advocacy Program (HICAP), or 2) our Senior Medicare Patrol (SMP) office directly at 714-560-0309, or by email to Julie Schoen, SMP Project Director, at .

Provides additional funds for Administration on Aging nutritional programs

The Recovery Act includes $100 million for congregate meals programs and home-delivered meals programs run by the AoA. California specifically will receive $9.8 million. See AoA’s website for more information.

Increases Federal Medical Assistance Percentage (FMAP) of Medicaid payments

The FMAP is the federal reimbursement rate for state Medicaid spending. The Recovery Act includes at least a 6.2% increase in every state’s FMAP – this will provide more federal dollars for every dollar California’s Medi-Cal program spends. While California was counting on $10 billion to cover the costs of many Medi-Cal programs, Bill Lockyer, California’s State Treasurer, (see his letter to Governor and Legislature – PDF) and the Legislature have confirmed our state is an estimated $1.8 billion dollars short of this goal. As a result, many Medi-Cal programs, such as Denti-Cal for adults, are scheduled to be cut as of July 1, 2009.

Provides funding for Health Information Technology (IT) in Medicare and Medicaid

The Recovery Act requires the Federal government to take the lead in health information technology (such as electronic health records) by establishing standards for nationwide electronic exchange and use of health information to improve quality and coordination of care by 2010. The provision also invests $19 billion in health information technology infrastructure and Medicare and Medicaid incentives to encourage doctors, hospitals and other providers to use health IT for electronically exchanging patients’ health information. For more information on the Recovery Act, see:

Karen Joy Fletcher

Our blogger Karen Joy Fletcher is CHA’s Communications Director. With a Masters in Public Health from UC Berkeley, she is the online “public face” of the organization, provides technical expertise, writing and research on Medicare and other health care issues. She is responsible for digital content creation, management of CHA’s editorial calendar, and managing all aspects of CHA’s social media presence. She loves being a “communicator” and enjoys networking and collaborating with the passionate people and agencies in the health advocacy field. See her current articles.