Federal Response to COVID-19: Health Care

By Brandy Whisman, CSG Policy Analyst


The ripple effects of COVID-19 are impacting millions of Americans. Due to social distancing guidance and mandatory shutdowns, many Americans deemed nonessential or unable to work from home have lost their only source of income. According to Pew Research, the most vulnerable professions are food and beverage industry workers and retail workers. As unemployment rates continue to climb, so does the need for social safety nets.

As a result of losing income, many Americans will need to apply for Medicaid to cover any health issues that arise. Medicaid has long been the health safety net for Americans with low incomes. Currently, Medicaid provides health care coverage to over 70 million Americans. The Center for Medicaid and Medicare Services (CMS) has responded by relaxing certain requirements for 1135 waivers and expansion for the 14 states who have not expanded already.

How are States Impacted?

Some states are already strained with Medicaid costs and an increase in enrollees could cause even more financial issues. In conjuction with the rise in Medicaid enrollees, states will see less taxes as less people are working. The federal government has partially addressed this with free coronavirus testing under the Families First Coronavirus Response Act, but what about treatment for those who test positive for the virus? In states that have expanded, the federal government cover 90% of the costs for newly eligible individuals.

Action at the Federal Level

Several federal agencies are providing guidance to states on Medicaid, treatment and equipment issues:


  • Medicaid has modified or waived certain requirements for 1135 waivers in response to the pandemic. 1135 waivers help beneficiaries access care quickly, instead of waiting for an individual approval for services.
  •  CMS has outlined a new section under 1115 waivers addressing public health crises.   


  • Treatment: The Food and Drug Administration (FDA) issued an emergency use authorization for hydroxychloroquine sulfate and chloroquine phosphate products to be distributed to certain Covid-19 patients.
  • The FDA released guidance on enforcement policy to expand the availability of sterilizers, disinfectant devices, and air purifiers.
  • Scams: The FDA sent warning letters to three companies for making false or misleading claims about Covid-19 products:
    • Gaia’s Whole Healing Essentials LLC
    • Homeomart Indibuy
    • Health Mastery Systems DBA Pure Plant Essentials


  • N95 Respirators: The CDC issued strategies for optimizing the supply of N95 respirators for use by federal, state, and local public health officials, respiratory protection program managers, occupational health service leaders, infection prevention and control program leaders, and other leaders in healthcare settings.

Resources for State Leaders: