April 24, 2020

Update on Coronavirus Response - Phase 3.5


KEY TAKEAWAYS

  • The Trump administration and state governments have taken action to ensure a swift response to the coronavirus outbreak, declaring state and public health emergencies that allow for additional federal support and easier access to health care services.
  • Congress has passed legislation to help respond to the pandemic by aiding the economy and ensuring health care providers have the support they need.
  • On April 24, President Trump signed the Paycheck Protection Program and Health Care Enhancement Act to appropriate $321 billion more for the small business loan program, $75 billion to support hospitals and health care providers, and $25 billion for COVID-19 testing. 

On March 13, President Trump declared the coronavirus to be a national emergency. He has used funds allocated by Congress to respond to the public health emergency; support businesses, workers, and families; and aid state and local governments.

latest Response by federal Agencies

The Centers for Disease Control and Prevention has distributed diagnostic kits to state and local public health laboratories to diagnose COVID-19 patients in the United States. The Food and Drug Administration granted an emergency use authorization to allow more labs to test samples and identify potential cases more quickly. As of April 23, there were 97 state and local public health laboratories using the CDC’s COVID-19 diagnostic test. The FDA has issued emergency use authorizations for several blood tests that can detect the development of coronavirus antibodies from a prior infection. 

Private companies have started converting their operations to produce medical and protective equipment. On March 18, President Trump activated his authority under the Defense Production Act to address the coronavirus emergency and subsequently ordered General Motors to prioritize production of ventilators under the act. On April 17, GM and Ventec Life Systems made the first delivery of their critical care ventilators. 

The Centers for Medicare and Medicaid Services has waived a number of requirements to make it easier for providers to furnish care to Medicare beneficiaries and Medicaid enrollees during the COVID-19 public health emergency. The waivers allow, among other things, hospitals to expand capacity by caring for patients in non-hospital settings and physicians to reach more patients by furnishing services over the phone.   

The National Institutes of Health is coordinating a public-private research response to the outbreak. Industry will work with government agencies to research, evaluate, and prioritize possible vaccines and treatments in hopes of streamlining clinical trials and responding to the virus more quickly. 

States and the Trump administration have taken sweeping measures to contain the spread of the virus. Schools and nonessential businesses have closed. On March 30, President Trump extended national social distancing guidelines, which include avoiding nonessential travel and gathering in groups of 10 or more people, until April 30. Some state leaders have extended stay-at-home orders even further.

Last week, the Trump administration released guidelines to reopen the economy gradually, with the ultimate decision left to state governors. The plan consists of a three-part approach for state and local officials in areas with low transmission of the virus to safely reopen their economies, ease social distancing requirements, and allow people gradually to return to work and public spaces. Some states have already begun to relax their orders and reopen more businesses. 

providing the resources to fight CORONAVIRUS

Congress has passed three laws to fight the COVID-19 pandemic. The first provided $7.8 billion in discretionary supplemental funds to target research and development of vaccines and treatments, and to support state and local public health departments. The second required paid sick and family leave, mandated that insurers cover coronavirus treatment for free, and increased funds for food aid and unemployment benefits.

The third phase of relief – the Coronavirus Aid, Relief, and Economic Security Act – increased payments to hospitals and health care providers, expanded telehealth access, and created a new Paycheck Protection Program to help small businesses stay open and pay their employees. Congress provided an initial $349 billion to support the Paycheck Protection Program. Before these funds ran out, the Small Business Administration and lenders across the country approved nearly 1.7 million loans, at an average of $206,000 per loan. The CARES Act also provided most American adults with economic impact payments of up to $1,200, based on their income, plus $500 per child. The Treasury Department says that 88 million people have received payments totaling nearly $158 billion as of April 17. Congress also provided up to $500 billion for the Treasury and Federal Reserve to leverage as loans to provide businesses, states, and cities with liquidity. It also set up a $150 billion relief fund to help states, the District of Columbia, territories, and tribal governments pay for coronavirus response costs.

The administration is implementing these laws and has been releasing information on the new programs, to deliver help to American businesses and families quickly.

On April 24, President Trump signed the Paycheck Protection Program and Health Care Enhancement Act. The law provides about $484 billion in total funding. It adds $310 billion in lending authority and $321.3 billion in appropriations for the Paycheck Protection Program; $60 billion for small business disaster loans and emergency advance grants; $2.1 billion for SBA administrative costs; $75 billion for hospitals and health care providers; and $25 billion for COVID-19 testing. The Congressional Budget Office estimates that over the 10-year budget window, the new measure will increase discretionary budget authority by $162 billion, which is emergency-designated funding. CBO says the measure will increase mandatory spending by $321 billion.

Small Business

  • The new law increases the authorization level for the Paycheck Protection Program from $349 billion to $659 billion, which provides $310 billion in new program authority. It appropriates $321.3 billion more to pay the costs of this additional lending. The new funding increases the total appropriated for the program to $670.3 billion.

Of the new $310 billion in program authority, the law sets aside $30 billion for loans made by insured depository institutions and credit unions with assets between $10 billion and $50 billion. It sets aside another $30 billion for loans made by insured depository institutions and credit unions with less than $10 billion in assets and by community financial institutions. Community financial institutions include community development financial institutions, minority depository institutions, microloan intermediaries, and SBA-certified development companies.

In general, businesses with 500 or fewer employees may apply for the program’s SBA loans. The maximum loan amount is 250% of the borrower’s average monthly payroll expenses up to $10 million. The federal government will forgive amounts that employers spend on payroll, rent, leases, mortgage interest, and utilities.

  • It provides $50 billion for the SBA’s disaster loan program and $10 billion for emergency advance grants under the Economic Injury Disaster Loan program. The CARES Act expanded this loan program by allowing businesses that apply for an EIDL to receive an advance of up to $10,000. They may use the grant to pay for employees’ sick leave, payroll costs, or other necessary obligations. As of April 19, the SBA had processed more than 755,000 EIDL advance grants totaling $3.3 billion. It had processed nearly 27,000 economic injury disaster loans totaling more than $5.5 billion.

  • It provides $2.1 billion in emergency appropriations for the SBA to cover additional salary and administrative expenses.

  • It makes agricultural enterprises with 500 or fewer employees eligible for Economic Injury Disaster Loans and emergency grant advances.

Health Care

  • The new law provides an additional $75 billion to the Public Health Services Emergency Fund to reimburse health care providers and hospitals for COVID-19 response expenses and lost revenue. The fund will remain available until expended. The CARES Act provided $100 billion for these purposes. The additional funding will be disbursed under the same terms established in the CARES Act, with funding going to public entities, Medicare and Medicaid suppliers and providers, and for-profit and nonprofit entities responding to COVID-19.

  • It provides $25 billion for testing efforts, including tests for active infection and previous exposure. These funds will be used to develop and administer tests, purchase necessary medical supplies to administer tests, and conduct surveillance and contact tracing. These funds will be provided through the Public Health and Social Services Emergency Fund. Within 30 days of enactment, recipients of these funds are required to report to HHS a testing plan detailing the number of tests required, monthly estimates of their lab and testing capacity, and information on how the recipient will be using the resources for mitigation purposes. In addition, the Department of Health and Human Services must submit to Congress a strategic testing plan detailing the provision of assistance to states and how testing will be increased domestically.

    • $11 billion is reserved for states, localities, territories, and tribes. Of this $11 billion:

      • $4.25 billion will be allocated to states, localities, and territories based on their relative number of COVID-19 cases.

      • $2 billion will be provided to states, localities, and territories based on the Public Health Emergency Preparedness grant formula.

      • $750 million will be provided to tribes, tribal organizations, and urban health organizations in coordination with the director of the Indian Health Service.

    • $1 billion to the CDC to expand lab capacity and to conduct surveillance and contact tracing.

    • $1.8 billion to the NIH to develop, improve, and accelerate rapid testing research and development. The National Cancer Institute receives $306 million for serological testing development. The National Institute of Biomedical Imaging and Bioengineering receives $500 million and the office of the director receives $500 million, for the development of point of care and rapid COVID-19 testing.

    • $1 billion to the Biomedical Advanced Research and Development Authority to research, develop and purchase COVID-19 tests.

    • $22 million to the FDA for efforts related to diagnostic, serological, and other COVID-19 testing.

    • $600 million for community health centers and federally qualified health centers.

    • $225 million for rural health clinics.

    • $1 billion may be used to cover the cost of testing for the uninsured.