On May 15, the U.S. House of Representatives passed H.R. 6800, the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act. The House-passed bill builds on previously enacted coronavirus relief legislation by providing older Americans and people with disabilities with additional financial and medical assistance that will help them survive the COVID-19 pandemic.
While the National Committee supports provisions in H.R. 6800 to provide additional funding to Medicaid, coverage for COVID treatment under Medicare and Medicaid, and support for nutrition programs, more will be needed to bolster Medicaid for the duration of the economic downturn. Further, we support federal funding for research and development of COVID vaccines and treatments, but manufacturers must be required to provide fair prices for products developed with public financing.
And although we support provisions in the HEROES Act to provide another round of cash stimulus payments to most Americans, including seniors, we oppose the bill’s employer payroll tax rebates and deferrals because they undermine the earned right benefit nature of Social Security and Medicare, opening the door for privatization or future benefit cuts that will hurt seniors and people with disabilities.
To follow is a summary of key provisions in the HEROES Act:
Provisions Supported by the National Committee:
- Additional recovery rebates to individuals: Provides a $1,200 refundable tax credit for each family member that shall be paid out in advance payments, similar to the Economic Impact Payments in the Coronavirus Aid, Relief and Economic Security (CARES) Act (P.L. 116-136). The credit is $1,200 for a single taxpayer ($2,400 for joint filers), in addition to $1,200 per dependent up to a maximum of 3 dependents. The credit phases out starting at $75,000 of modified adjusted gross income (MAGI) ($112,500 for head of household filers and $150,000 for joint filers) at a rate of $5 per $100 of income. That means a single filer with MAGI above $99,000 will not get a check, while that cutoff is $198,000 for married couples.
- Social Security, Supplemental Security Income (SSI) and Veterans beneficiaries automatically receive recovery rebates: Clarifies that Social Security, SSI and Veterans beneficiaries would automatically receive rebate payments even if they did not file federal income taxes in 2018 or 2019. The Federal Trade Commission announced on May 15 that nursing homes and assisted living facilities cannot take away recovery rebates from their residents just because they are Medicaid beneficiaries.
- Ensure that recovery rebates benefit intended Social Security beneficiary: Clarifies that recovery rebates paid to representative payees and fiduciaries on behalf of Social Security beneficiaries be used for the benefit of the person for whom the payment was intended. Misuse or misappropriation of payments by a representative payee or fiduciary would be subject to the same recovery remedies that apply to Social Security and SSI benefits.
- Federal Medicaid payment:Increases the share of federal Medicaid funding known as the Federal Medical Assistance Percentage (FMAP) to a total of 14 percent through June 30, 2021. Prevents the Secretary of Health and Human Services (HHS) from finalizing a proposed rule that would limit the ability of states to raise their state share of Medicaid funding needed to draw down federal funding.
- Medicaid home and community-based care:Increases the federal payments to state Medicaid programs by an additional 10 percent starting July 1, 2020 through June 30, 2021 to strengthen their home- and community-based services (HCBS) coverage.
- Infection control in nursing homes: Provides incentives for nursing homes to create COVID-19-specific facilities and includes safety and quality protections for patients. Directs the Department of Health and Human Services (HHS) to allocate money to the states to create strike teams to help facilities manage outbreaks when they occur. Requires the Secretary of HHS to provide additional help to facilities grappling with infection control. Requires HHS to collect data on COVID-19 in nursing facilities and to publicly report demographic data on COVID-19 cases in nursing homes on Nursing Home Compare.
- Boosting Testing Capacit Requires the Secretary of HHS to update the COVID-19 strategic testing plan required under the Paycheck Protection Program and Health Care Enhancement Act (P.L. 116-139) by June 15, 2020. Requires the Centers for Disease Control and Prevention (CDC) to coordinate with – and provide grants to – state and local health departments to establish and implement a national evidence-based system for testing, contact tracing, surveillance, containment, and mitigation of COVID-19. Requires CDC and other relevant agencies to issue guidance, provide technical assistance and information, for state and local governments regarding contact tracing.
- Telehealth in Nursing Homes: Ensures communications accessibility for residents of skilled nursing facilities during the COVID-19 emergency period. Ensures skilled nursing facilities provide a way for residents to have “televisitation” with loved ones while in-person visits are not possible during the pandemic emergency.
- No Medicare beneficiary cost sharing for COVID-19 treatment: Provides zero cost sharing (out-of-pocket costs) for COVID-19 treatment under Medicare Parts A and B and under Medicare Advantage (MA) during the pandemic. Requires coverage under Medicare Prescription Drug Plans (PDP) and MA-PDPs without cost-sharing or Utilization Management Requirements for drugs meant to treat COVID-19 during the emergency.
- Easing Medicare Enrollment barriers. Establishes a new special enrollment period for Medicare Parts A and B eligible individuals during the COVID-19 pandemic.
- Coronavirus prevention, preparedness and response: Provides $4.745 billion to the National Institutes of Health to expand COVID-19-related research on the NIH campus and at academic institutions across the country and to support the shutdown and startup costs of biomedical research laboratories nationwide. Allocates $4.575 billion to Assistant Secretary for Preparedness and Response for research and development of coronavirus therapeutics and vaccines.
- Older Americans Act Services: Allocates $100 million for Older Americans Act direct services such as home delivered meals, and supportive services for seniors and disabled individuals, and their caregivers.
- Food Security: Increases Supplemental Nutrition Assistance Program benefits by 15 percent. This benefit increase will help many low-income seniors who have lost access to free congregate meals while they have sheltered in place.
- Housing for the Elderly:$500 million increase in funding to maintain housing stability and services for low-income seniors.
- Support for the Postal Service: Provides the U.S. Postal Service (USPS) with $25 billion for revenue forgone due to the coronavirus pandemic and includes language providing additional protections to Postal workers. Seniors and people with disabilities rely on the USPS to deliver their lifesaving prescription medications and other necessities, allowing them to remain safely at home.
Changes to the House-Passed HEROES Act supported by the National Committee
- Medicaid funding. The FMAP Medicaid increase should be tied to the end of the economic downturn instead of just increased for one year.
- Affordability of COVID treatment and prevention. The HEROES Act should require reasonable pricing in return for public funding of any of the research used in developing treatments or vaccines. Expansive patent and regulatory monopolies – including additional ones for existing therapies that can be used to treat COVID – should not be granted. The global scale of the pandemic will enable drug manufacturers to make large profits from fairly priced products on volume alone. To the extent policy makers believe additional inducements are needed to incentivize development of vaccines or treatments for COVID, they should be targeted narrowly to reward development of effective treatments or to fairly pay for the price of altering an existing drug or getting it approved for a new use.
Provisions Opposed by the National Committee:
Like the CARES Act, the HEROES Act uses the Social Security and Medicare trust funds as a means of financing assistance to enable employers to weather the COVID-19 recession. Specifically, the HEROES Act provides payroll tax credits to employers who pay:
- Pandemic-related employee benefit expenses, including personal, family, living, or funeral expenses.
- Fixed expenses when a business has closed due to the pandemic, including rent, mortgage, and utility payments.
- Paid sick and family leave through the end of 2021.
In addition, the HEROES Act allows businesses receiving Small Business Administration Paycheck Protection Program loan forgiveness to defer payment of payroll taxes – half until next year and the other half until 2022.
While the intentions of these incentives are commendable, we believe that it is not in the best interests of Social Security, or current and future beneficiaries, to have it used as a funding mechanism for any activity that isn’t related to the Social Security program. While Congress should do more to provide economic assistance to American workers during the pandemic, we encourage legislators to find ways of helping employers and their employees without involving the Social Security program in the process.
Having said that, we want to acknowledge that to the extent that provisions in COVID relief measures have affected the Social Security trust funds, those funds have been replenished by transferring money from the general fund to the Social Security trust funds – as is the case with payroll tax provisions in the HEROES Act.
We are concerned, however, that as more and more general funds are being transferred into the Social Security trust funds, that the program will be seen as one that is dependent on appropriations from Congress rather than one that is sustained by dedicated funding sources that are paid directly by American workers. Weakening this “earned right” nature of the program is detrimental to Social Security.
[1] Excerpted in part from summary prepared by the U.S. House of Representatives Democratic staff of the relevant committees of jurisdiction.