The federal Stimulus Package is a complicated policy that is rolling out in phases:
- Read an overview and analysis of the phases here.
- Read our analysis of the implications for Local and State Level Governments for Phases 1-3 here.
Phase 3.5 has significant impacts on local and state governments. The most significant changes are related to providing health care and testing for COVID-19 in rural areas, and reporting that local governments must complete:
Support for Healthcare Providers and Hospitals
This bill provides an additional $75 billion that will be used to reimburse local hospitals and healthcare providers for COVID-19 related expenses and may include reimbursement for services provided to uninsured persons and lost revenue. This additional funding is meant to support rural providers and providers who primarily serve those on Medicaid (positive news for rural areas, counties, and lower-income municipalities whose populations are reliant on Medicaid).
Provisions for Testing
This bill ramps up testing efforts, particularly for rural areas and for individuals who are currently uninsured. A total of $25 billion is allocated for “necessary expenses to research, develop, validate, manufacture, purchase, administer and expand capacity for COVID–19 tests.” This funding is broken down into the following sections:
- $11 billion in direct funding for states, localities and territories to scale up COVID-19 testing, laboratory capacity, contact tracing and support employer testing.
- $225 million in direct funds to rural health clinics through grants and other mechanisms.
- Up to $1 billion to cover the cost of testing for the uninsured.
These funds must be allocated within 30 days of the bill’s enactment.
Some $2 billion of the $11 billion for state and local funding be distributed using an existing formula that was developed by the CDC to help states prepare for public health emergencies. After these allocations, a remaining $4.25 billion will be distributed using a formula based on the number of COVID-19 cases and $750 million will be provided directly to tribes and tribal organizations.
Currently, the formulas that will be used to disburse this funding are still being developed by the Department of Health and Human Services. Little information is known yet about what these formulas will include.
State and Local Level Reporting
Phase 3.5 of the Stimulus Package also mandates that in order to make use of resources that this bill allocates for COVID-19 testing and mitigation, state and local governments must report on how they intend to use them. The exact details that will be required in the report are still being finalized, but it is anticipated that plans will outline expected use of funds through the end of 2020 as related to:
- Number of tests needed on a monthly basis
- Estimate of laboratory and testing capacity including related workforce
- Equipment, supplies, and available tests
- Description of how resources will be used for testing and community mitigation efforts
Increased reporting requirements and short deadlines in which to allocate funding may pose big questions for state and local governments with limited capacity.
Are you working on implementing these or other policy solutions related to local and state governments? We want to hear more about the work you’re doing and help you share important information.
Please contact Policy Coordinator Taylor Bennett at firstname.lastname@example.org.
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