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What’s in next coronavirus stimulus? Analysts say checks, cash for states.

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  • Congress and the Trump administration are negotiating another coronavirus stimulus bill.
  • Top analysts told us the legislation will spend $1.5 trillion in all.
  • They said it will provide for extra unemployment payments, shield employers from coronavirus liability, and send another round of cash to individuals. 
  • They also predicted hospitals and doctors would get more money and that the government would subsidize health insurance plans for people who lose their jobs.  
  • For more stories like this, sign up here for our healthcare newsletter, Dispensed.

Lawmakers and Trump administration officials are preparing the next pandemic bailout bill as the US continues to see surges of the coronavirus. 

Analysts told Business Insider that they think the bill’s pricetag will land close to $1.5 trillion, and that it will have a mix of elements designed to satisfy Republicans and Democrats, including liability protections for businesses, a cash rescue for states, and more money for people who are out of work or who have low incomes.

Eric Assaraf and Rick Weissenstein of Cowen Washington Research Group said in a note that the bill will likely pass in early August. Congress will sprint toward a vote when they return to Capitol Hill July 20 and will have until August 7 to legislate before the summer recess.

Henrietta Treyz, director of economic policy at Veda Partners, predicted that fewer senators would vote in favor of the next bill, but that it would still pass. The $2 trillion CARES Act, another stimulus bill, passed unanimously in March.

The text of the bill isn’t out, and conversations are still ongoing, but here are several measures analysts are predicting will make the cut:   

More money for hospitals and doctors

More money is expected to go to the provider relief fund, which Congress set up to help struggling hospitals, clinics, and doctor’s offices.

Spencer Perlman, director of healthcare research at Veda Partners, predicted providers would get another $50 billion to $75 billion. They already received $175 billion under previous measures, but not all of it has been spent. 

Weissenstein of Cowen said in an email that he did not expect “nearly as much [money] as in the previous bills.”

Analysts also predicted an increase in the amount of money that the federal government kicks in to help states with Medicaid, which covers low-income people, pregnant women, people with disabilities, and a third of US children. 

They predicted, as well, that more money would be set aside for coronavirus testing. 

Protecting employers from coronavirus lawsuits

Senate Majority Leader Mitch McConnell has said coronavirus liability protections will be key to helping businesses reopen, and that any future legislation must have them.  

Employers — including businesses, schools, nonprofits, and hospitals — have lobbied Congress for the protections, warning that they will otherwise face unfair lawsuits from people who say they got the virus, or were exposed to it, at their place of business.

“I find it hard to overstate how many people are interested in that,” Clayton Allen, senior vice president for trade, policy, and geopolitical risk at Height Capital Market, said of the protections. 

Ben Koltun, senior research analyst at Beacon Policy Advisors, predicted the liability shields would last five years and be retroactive to December 2019.

The main sticking point is that labor unions, who have warm relationships with Democrats, are worried that the protections will leave workers without recourse if they face unsafe work conditions. 

Read more: Companies are pushing for new protections from coronavirus lawsuits, and Senate Republicans agree. Here’s everything we know about what’s in the works.

$500 billion for states 

States are losing a significant amount of revenue, thanks to coronavirus-related closures, and the National Governors Association has said states need a total of $500 billion to stay afloat. 

Kolton said he thought the funding in the next bill would hit that amount, while Goldman Sachs predicted $250 billion in relief to states. The HEROES Act, a bill that passed the Democratic-controlled House, would have given nearly $1 trillion to state and local governments. 

Another round of checks to individuals 

President Donald Trump told FOX Business Network on July 1 that he supports another round of checks for individuals. The CARES Act provided onetime $1,200 cash payments to individuals, with more going to married couples and families with kids. People with higher incomes got less cash. 

Treasury Secretary Steven Mnuchin said on MSNBC that the “level and criteria” of cash payments for the next bill still needed to be worked out, and McConnell said the Senate is considering limiting payments to people making up to $40,000 a year. 

“It’s politically popular to give people money and that’s been true for all of history,” Allen said. 

Jobless benefits blended with a ‘back to work’ bonus

Many people who are unemployed have been receiving an additional $600 a week in jobless benefits thanks to the CARES Act Congress passed in March. That’s set to expire at the end of July, and analysts don’t think it’ll get extended at that same level in the next bill. 

Instead, they predicted the unemployed would still get higher payments than their previous paychecks, but that the amount would be less than $600.

They think this will be blended with a proposal to give people a “return-to-work bonus” so that they’re not discouraged from working.

Goldman Sachs analysts predicted the extension would land at unemployment payments of about $300 a week through the end of the year, saying it would be “politically challenging to let the payments expire completely.” 

Health insurance subsidies 

Laid-off people are able to stay on the health insurance they got at their jobs through a program known as COBRA. Under current law, however, they have to pay the full cost of coverage — including their employer’s share — themselves. That typically means only the sickest people enroll because premiums become prohibitively expensive. 

Perlman of Veda predicted that a provision to have the government pick up the full tab would gain support mainly because hospitals were pushing for it. Hospitals get paid significantly more under private health insurance than they do for caring for people on Medicaid or for the uninsured. 

Perlman predicted Congress would subsidize the plans for six to eight months. If they didn’t end up subsiding full premiums, he said, then he thought subsidies would go no lower than an 85%. 

The Cowen analysts were more reticent, saying the provision had a less than 50% chance of making it into the bill. If it does make it into the bill, then the analysts think it won’t cover the full cost of premiums.

Funding for schools  

Kolton from Beacon predicted the bill would set aside $100 billion for childcare, schools, and colleges, coupled with directing the Trump administration to provide more guidance about how schools could reopen safely. 

“This is critical for getting the economy moving forward,” Kolton said. “You can have a moving economy when kids are still at home.” 

Schools have said they’ll need more money for testing, protective equipment, and for creating more spaces to spread children out in classrooms. 

Treyz of Veda predicted the funding allocation for schools would come from the money allocated to states.

Tweaks to the small business loan program

The Paycheck Protection Program, created under the CARES Act and expanded under an interim bill, let small businesses apply for forgivable loans. The full fund was $670 billion, and roughly $130 billion is left. 

Kolton said Congress could provide more guidance about what kinds of businesses should be allowed to qualify for the remaining funds or even add more cash to the fund. 

Other policies getting a close look 

Next steps for letting doctors see patients over phone and video: Congress allowed more people to see their doctors over phone and video during the pandemic. There’s a huge push from providers to make the changes permanent, but it’s expected to be costly.

One lobbyist close to the discussion said there’s talk about reducing how much providers get paid for virtual visits so that they wouldn’t get paid as much as an in-person visit. But there’s also interest from lawmakers in expanding telehealth permanently by letting people see doctors from their homes — rather than going to a specific site to do so — as well as making sure that people living outside rural areas can qualify, Perlman of Veda said. 

Industry-specific bailouts: Treyz said she could see the possibility of Congress setting up a fund specifically for certain industries that have been particularly hard-hit, such as restaurants, hotels, or music venues.

Money for the Postal Service: Analysts think the agency will get some funding, but at a lower level than Democrats pushed for in the HEROES Act. That bill would have provided $25 billion. 

Home drug infusions: Healthcare groups are pushing for more Medicare patients to be able to get IV medications at home, rather than requiring them to go into a healthcare facility. A collection of bipartisan senators and House members are pushing for the change. 

“I think it’s something that is really strongly in play,” said Shea McCarthy, senior vice president at Thorn Run Partners.

What’s unlikely to make it in

Controls on healthcare prices: The Cowen analysts predicted that measures on drug pricing and surprise billing wouldn’t make it into the August stimulus.  

Payroll tax holiday: No analyst interviewed for this article said that a measure to cut the payroll tax rate for workers and businesses to 0% would make it into the bill, even though Trump and several Republicans have voiced support for it. 

Koltun from Beacon said he could see an employee retention tax credit making the cut instead. Under this approach, businesses are encouraged to keep workers on payroll. The CARES Act and the HEROES Act both had the provision. 

Airline bailout: “The answer to that seems to be a resounding no,” Treyz said. 

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