President Obama Announces Start of Economic Stimulus Package’s COBRA Subsidies

President Obama on Thursday announced the start of distribution of federal subsidies included in the recently enacted economic stimulus package to help recently unemployed workers cover the cost of health insurance premiums under COBRA, the Boston Globe reports (Boston Globe, 2/27). Under the stimulus package, workers involuntarily terminated between Sept. 1, 2008, and Dec. 31, 2009, whose annual incomes do not exceed $125,000 for individuals or $250,000 for families qualify for subsidies to cover 65% of the cost of health insurance premiums under COBRA for as long as nine months (Kaiser Daily Health Policy Report, 2/19).

According to Obama, the subsidies will help seven million workers, who will have "one less thing to worry about when they go to sleep" (AP/Chicago Sun-Times, 2/26). He added that the subsidies will help prevent a "further downward spiral in our economy by ensuring these families don't fall further behind because of mounting health care bills" (Boston Globe, 2/27).

Congressional Republicans Launch Stimulus Watchdog Group
Several House and Senate Republicans on Thursday announced the launch of a new group to track the implementation of the stimulus package, Roll Call reports. In a statement, House Minority Whip Eric Cantor (R-Va.) said, "This bicameral group will serve as a watchdog and utilize innovative technologies and new approaches to ensure that taxpayer dollars in the stimulus bill are spent accountably." Kyle Downey, a spokesperson for Senate Republican Conference Vice Chair John Thune (R-S.D.), said, "Any time you spend money this quickly, there is going to be waste, fraud and abuse," adding, "What we're doing here is saying we're going to add some checks and balances to this system."

According to Roll Call, the group likely will "hold hearings in the coming weeks as the stimulus goes into effect" (Brady, Roll Call, 2/26).

Distribution of Funds From Stimulus Package Varies
Some federal agencies "are moving faster than others" in the distribution of funds from their portions of the stimulus package, and "would-be grant recipients are seeking any scrap of information they can get in hopes of winning some of the money," the Wall Street Journal reports. According to the Journal, much of the "planning required to give out the funds is being done by career bureaucrats because top political appointees at many agencies have yet to be nominated."

Some federal agencies, such as NIH, have "simplified the process of getting funds out the door quickly by using previously submitted grant proposals," the Journal reports. NIH officials have said that the agency will distribute most of the $10 billion included in the stimulus package for medical research and renovations of research facilities to current applicants. Pat White, vice president of federal relations at the Association of American Universities, said, "It would probably be better if the political appointees were already there, but the (NIH) staff has a lot of experience handling applications" (Schatz, Wall Street Journal, 2/26).

Medical Researchers Seek Additional Funds
"Biomedical research groups sense an opportunity to build" on funds for medical research included in the stimulus package and "are pressing lawmakers and the Obama administration for more money," The Hill reports. According to The Hill, the groups view the omnibus appropriations bill currently under consideration in Congress, as well as fiscal year 2010 appropriations legislation, as "prime targets for more funding."

Richard Marchase, president of the Federation of American Societies for Experimental Biology and vice president of research and economic development for the University of Alabama, said that the groups seek annual budget increases of at least 7% for NIH. Timothy Gardner, president of the American Heart Association and medical director for the heart center at the Christiana Care Health System, said, "Research is not effective if it goes up and down in terms of financial support," adding, "We're certainly not going to back off" (Young, The Hill, 2/25).

State Spending
With $15 billion of the stimulus funding for state Medicaid programs being distributed immediately, some states are shifting their resources to fill budget gaps and use state money for other purposes, the AP/Detroit Free Press reports. For example, California Gov. Arnold Schwarzenegger (R) has said that his state will receive $7.9 billion in stimulus funding that will be used to shore up the state general fund, much of which will come from additional Medicaid assistance. Arizona and New Hampshire also plan on using part of their Medicaid funds to help close their budget shortfalls. A spokesperson for Michigan Gov. Jennifer Granholm (D) said Wednesday that $313 million of the $464 million the state received in Medicaid funding will go toward balancing this year's budget (Barks Hoffman, AP/Detroit Free Press, 2/25).

Meeting Requirements
North Carolina and Virginia are not immediately eligible for the their full shares of the $15 billion in Medicaid funds President Obama distributed Monday because they have not yet met federal requirements to reinstate services and eligibility rules that the states cut last year, McClatchy/Columbia State reports (Rosen, McClatchy/Columbia State, 2/24). The states have until July 1 to comply with the requirements to receive the funds. Mark Van Sciver, a spokesperson for Secretary Lanier Cansler of the North Carolina Department of Health and Human Services, said, "There are some technical issues we have to work out," but, "We do not feel we are not going to get this money" (Zagaroli, Charlotte Observer, 2/24). The South Carolina Department of Health and Human Services announced Thursday that they have reached an agreement with CMS to immediately receive $173 million of their expected funds as they are actively restoring eligibility standards and some programs that were cut last year due to budget issues (Augusta Chronicle, 2/26).