The CARES Act Economic Stimulus Package and Its Effect on Medicare

• by Christian Worstell
• February 5, 2021

Published April 1, 2020

Follow our Medicare Coronavirus News page for related information on coronavirus (COVID-19) and its impact on Medicare beneficiaries.

The economic stimulus checks being issued by the federal government in response to the novel coronavirus (COVID-19) outbreak impact the pocketbooks of millions of Americans. But what will it mean for Medicare?

The Coronavirus Aid, Relief and Economic Security (CARES) Act earmarked billions of dollars for hospitals and other providers. Here are three specific ways the bill will affect Medicare. 

Increased rates of reimbursement for hospitalizations

The CARES Act grants a 20 percent increase in reimbursement to hospitals for inpatient stays resulting from COVID-19 infection. This will help boost hospitals’ financial resources as they treat patients infected with COVID-19.

Suspension of the Medicare sequester

The annual Medicare sequester is a result of the Budget Control Act of 2011, which implemented automatic, across-the-board reductions in federal spending. The sequester is an annual 2% cut in Medicare payments that hospitals, doctors and other health care providers receive. 

As a result of the COVID-19 outbreak, the CARES Act has suspended the annual sequester through the end of 2020, giving providers greater budgetary resources to fight the outbreak without financial policy restrictions.

Expansion of the Medicare Hospital Accelerated Payment Program

Advanced and accelerated Medicare payments provide emergency funding to hospitals based on disruptions in Medicare claims submission or claims processing, such as during a natural disaster or a situation like the current COVID-19 outbreak.

The Hospital Accelerated Payment Program expedites payments to hospitals during these times of increased need.

The CARES Act also expanded the program to all Medicare providers in the U.S. during the COVID-19 pandemic, to include children’s hospitals, critical care hospitals and cancer hospitals.

The accelerated payments can also be requested by doctors, durable medical equipment suppliers and other Medicare providers. 

About the author

Christian Worstell is a senior Medicare and health insurance writer with MedicareAdvantage.com. He is also a licensed health insurance agent. Christian is well-known in the insurance industry for the thousands of educational articles he’s written, helping Americans better understand their health insurance and Medicare coverage.

Christian’s work as a Medicare expert has appeared in several top-tier and trade news outlets including Forbes, MarketWatch, WebMD and Yahoo! Finance.

Christian has written hundreds of articles for MedicareAvantage.com that teach Medicare beneficiaries the best practices for navigating Medicare. His articles are read by thousands of older Americans each month. By better understanding their health care coverage, readers may hopefully learn how to limit their out-of-pocket Medicare spending and access quality medical care.

Christian’s passion for his role stems from his desire to make a difference in the senior community. He strongly believes that the more beneficiaries know about their Medicare coverage, the better their overall health and wellness is as a result.

A current resident of Raleigh, Christian is a graduate of Shippensburg University with a bachelor’s degree in journalism.

If you’re a member of the media looking to connect with Christian, please don’t hesitate to email our public relations team at Mike@tzhealthmedia.com.

 

 

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