Interim CARES Supplemental for COVID-19

On April 24, President Trump signed into law a $484 billion package that builds on last month’s Coronavirus Aid, Relief, and Economic Security (CARES) Act (H.R. 748). This package, the Paycheck Protection Program and Health Care Enhancement Act (H.R. 266), primarily includes funding for a small business loan program created by the CARES Act. It also includes $75 billion for the CARES Act’s health care provider relief fund and $25 billion for COVID-19 testing. Details on this interim package follow.

INTERIM CARES SUPPLEMENTAL PROVISIONS

For Small Businesses

The CARES Act included $350 billion in loan forgiveness for small businesses and non-profits through the Paycheck Protection Program (PPP). The program began on April 3 and ran out of money within two weeks. This package adds another $310 billion to PPP, which can be accessed by businesses and non-profits with less than 500 employees, self-employed workers, and some companies that are part of food or hotel chains. These loans can be forgiven for borrowers that pay eligible payroll expenses or rehire workers over eight weeks.

In addition, the package provides a second allotment of $10 billion to the Small Business Administration’s (SBA) Economic Injury Disaster Loan program, which was created by the CARES Act. The package also includes $50 billion for additional SBA guarantees under its broader disaster loan program.

For Health Providers

Under the CARES Act, $100 billion was included to ensure hospitals and healthcare providers continue to receive the support they need for COVID-19 related expenses and lost revenue. The Department of Health and Human Services (HHS) has already released the first tranche of $30 billion from this fund based on Medicare reimbursements, and it will shortly begin releasing the next $20 billion based on providers’ overall net revenues. The remaining $50 billion has been reserved in the following way:

  • $10 billion to hospitals in hot spot areas like New Jersey and New York;
  • $10 billion to rural providers;
  • $400 million to the Indian Health Services; and
  • $29.6 billion to skilled nursing facilities, dentists, and Medicaid providers.

This package includes an additional $75 billion for this provider relief fund. Grants will continue to be given to hospitals, public entities, not-for-profit entities, and Medicare and Medicaid enrolled suppliers and institutional providers under the CARES Act formula to cover unreimbursed health care related expenses or lost revenues attributable to the public health emergency resulting from the coronavirus.

For Testing

H.R. 266 provides $25 billion for COVID-19 testing, including for active infections and previous exposure. Funding can be used for manufacturing and distributing tests, procuring supplies such as personal protective equipment needed to administer tests, developing rapid point-of-care tests, and conducting surveillance and contact tracing. As much as $1 billion of the testing funds can be used to cover tests for the uninsured.

States, localities, territories, and American Indian tribes will have access to $11 billion from this pot. The formula for distributing these funds was championed by Senators Bob Menendez (D-NJ) and Bill Cassidy (R-LA). The breakdown is as follows:

  • At least $4.25 billion would be allocated to states, localities, and territories based on their relative number of COVID-19 cases.
  • At least $2 billion would be allocated to states, localities, and territories based on a formula that applied to the Public Health Emergency Preparedness cooperative agreement in FY 2019.
  • At least $750 million would be allocated to tribes via the Indian Health Service.

The measure also sets aside the following amounts:

  • $1 billion for the Centers for Disease Control and Prevention for activities such as surveillance, contact tracing, and lab capacity expansion.
  • $1 billion for the National Institutes of Health to develop testing and accelerate research on rapid testing, $500 million for the National Institute of Biomedical Imaging and Bioengineering, and $306 million for the National Cancer Institute.
  • $1 billion for the Biomedical Advanced Research and Development Authority for research, manufacturing, and purchasing tests.
  • $600 million for community health centers and federally qualified health centers as well as $225 million for rural health clinics.
  • $22 million for the Food and Drug Administration.