May 2004 HIV/AIDS POLICY ISSUE BRIEF FINANCING INTRODUCTION Figure 1: Estimated Number of People Living There are multiple sources of insurance coverage with HIV/AIDS and Proportion Not in Care, HIV/AIDS United States, 2000 CARE: A QUILT and care for people with HIV/AIDS in the United WITH MANY States. Insurance coverage is important to help promote access to regular and high quality care. HOLES Of those who are insured and in the care system, most are covered by public sector insurance pro- May 2004 grams (primarily Medicaid or Medicare or both). 850,000 to 950,000 INTRODUCTION 1 The uninsured and the underinsured rely on an Living with array of safety net programs including the Ryan HIV/AIDS THE COST OF HIV CARE: White Comprehensive AIDS Resources Emergency 42% to 59% A CONTINUING Not In Care (CARE) Act, community and migrant health cen- CONCERN 1 ters, private “free clinics”, and public hospitals. Some people with HIV/AIDS have private insur- Source: Fleming, P., et.al., HIV Prevalence in the United States, INSURANCE COVERAGE ance but may still need to rely on the Ryan White 2000, 9th Conference on Retroviruses and Opportunistic Infections, OF PERSONS WITH Abstract #11, Oral Abstract Session 5, February 2002. CARE Act to fill in the gaps. HIV/AIDS 2 THE COST OF HIV CARE: A CONTINUING FEDERAL SPENDING ON These multiple sources of coverage and care for CONCERN HIV/AIDS CARE 4 people with HIV, however, are not well coordi- Financing care for people with HIV/AIDS has been nated across programs, making it difficult for of concern since early in the epidemic when HOW IS HIV/AIDS patients, their advocates, and providers to navi- people with HIV/AIDS often required expensive CARE FINANCED: gate access. Moreover, these programs often vary hospital inpatient and end-of-life care.8,9,10 The MAJOR SOURCES OF by state, resulting in differential access across the introduction of antiretroviral drug treatment in COVERAGE AND CARE 5 country. As such, the current system of financ- 1987 did not allay cost concerns – the very first ing for HIV care represents a complex patchwork FDA-approved AIDS drug, AZT, carried an ini- 11 POLICY that leaves some outside the system and presents tial pricetag of $10,000 a year. The current CHALLENGES 16 others with financial barriers to accessing needed standard of care – combination antiretroviral care.1,2,3,4 therapy or HAART – calls for the use of expen- CONCLUSION 18 sive antiretrovirals in combinations of three, four, Indeed, despite the existence of national treat- or even more medications.5 HAART has been ment guidelines5 calling for early access to medi- largely responsible for significant declines in The Henry J. Kaiser Family Foundation cal care and treatment, including highly active HIV-related deaths and improved health status antiretroviral therapy (HAART), an estimated 42% for many.12,13 Combination therapy alone costs 2400 Sand Hill Road to 59% of the almost one million people liv- between $10,000 and $12,000 per patient per Menlo Park, CA 94025 ing with HIV/AIDS in the U.S. are not in regular year depending on the regimen and payer (newer Tel: (650) 854-9400 6 care (see Figure 1). While a proportion of these formulations of more than one antiretroviral Fax: (650) 854-4800 individuals may not know their HIV status (up to drug may be priced as high as their component 7 14,15,16,28 Washington office: one-third of those living with HIV/AIDS ),), othersothers parts). When additional medical expenses 1330 G Street, NW do not have access to insurance coverage (or face for doctor’s visits, laboratory tests, and drugs to Washington, D.C. 20005 limits in their coverage) or care programs to help prevent or treat HIV-related opportunistic infec- Tel: (202) 347-5270 them afford the high cost of HIV treatment and tions are taken into account, average annual costs Fax: (202) 347-5274 services. The costs of HIV care present significant rise to approximately $18,000 to $20,000 per financial barriers to access for people with patient, with even higher expenses for those with www.kff.org HIV/AIDS and strain the systems that serve them. more advanced HIV-related illness.16,17,18,19,20 This issue brief was prepared by Jennifer Kates of the Kaiser Family Foundation. It also appears in, The Institute of Medicine, Report from the Committee on Public Financing and Delivery of HIV Care, 2004. An earlier version of this Kaiser Family 1 Foundation brief was prepared by Jennifer Kates and Richard Sorian and released in 2000. The Kaiser Family Foundation | HIV/AIDS ISSUE BRIEF May 2004 HIV is increasingly affecting people who are poor, outside the INSURANCE COVERAGE OF PERSONS WITH HIV/AIDS workforce, and have a history of barriers to access.13,21 Even There are several challenges to assessing insurance coverage among those individuals who have resources, the costs of of persons with HIV/AIDS. These include difficulties in access- HIV care can quickly exhaust their assets and may leave them ing the population of people with HIV/AIDS, given that a sig- impoverished. In addition, despite improvements in treatment, nificant proportion is not in the care system and many do not HIV/AIDS is often a disabling condition that forces individuals know their HIV status, as well as limitations in data systems, to leave the workforce (or be unable to enter the workforce) methodological complexities, and the lack of capacity by major thereby losing access to both income and, eventually, private purchasers of care (e.g., state Medicaid programs) to perform insurance. Indeed, many people with HIV in care are low- client-level payer status analysis. income (an estimated 46% have incomes below $10,000 a year) and unemployed (63%).18 Because of these factors, peo- Coverage of Those In Care ple with HIV rely heavily on the public sector for care.10, 22, 23 The HIV Cost and Services Utilization Study (HCSUS), the only nationally representative study of people with HIV/AIDS in care, Expenditures for HIV/AIDS care, including public expenditures, found that one-third to one-half of all people with HIV/AIDS have risen significantly over time.22,23 Spending increases were in regular care in 1996.18,30 More recent estimates from largely reflect growing numbers of people living with HIV/AIDS the Centers for Disease Control and Prevention (CDC) place this in need of services and increasing health care costs, particu- range slightly higher, between 41% and 58%.6 larly for prescription drugs. A recent analysis by the National Institute for Health Care Management (NIHCM) Foundation, Most of those in care rely on public sector insurance programs for example, found that national retail drug expenditures for or are uninsured, estimated to range between approximately antiretrovirals totaled $2572.4 million in 2001, representing 70%31 and 83%32. HCSUS found that one-half are estimated an almost 21 percent increase over 2000, compared to a 17% to depend on the Medicaid (44%) or Medicare (6%) programs increase for all retail prescription drug sales over the same for coverage and one in five (20%) are uninsured31 (com- period.24 Analysis prepared for the Kaiser Family Foundation paratively, among American adults overall, 6% are estimated indicates that Medicaid spending on antiretrovirals increased to be covered by Medicaid, 2% by Medicare, and 19% are significantly between 1991 and 1998, particularly after the uninsured33). Almost one-third have private insurance, a much introduction of HAART.25 Spending on HIV/AIDS treatments smaller percentage than the U.S. adult population overall (31% by AIDS Drug Assistance Programs (ADAPs) has also increased of people with HIV compared to 73% of American adults over- significantly over time.48 all33). (see Figure 2). It is important to note that people with HIV/AIDS in care who are uninsured may be receiving care from Despite the high costs to patients and the payers and programs Ryan White CARE Act programs or other safety net providers. that serve them, spending on HIV care (an estimated $6.1 bil- lion in 199819) represents only a very small proportion – less than 1% – of estimated spending on overall direct personal Figure 2: Estimated Insurance 26 Figure 2: Estimated Insurance Coverage of health care expenditures in the U.S. In addition, several stud- PeopleCoverage Living of Peoplewith HIV/AIDS Living inwith Care, ies have demonstrated the cost effectiveness of HIV care when UnitedHIV/AIDS States, in Care, 1996 United States, 1996 compared to the treatment of many other disabling condi- tions.16,27,28,29 For example, a recent study found that the cost Medicaid* 44% effectiveness ratios of combination therapy for HIV infection None ranged from $13,000 to $23,000 per quality-adjusted year of 20% life gained (vs. no therapy) compared to $150,000 per quality- adjusted year of life gained for dialysis patients.28 FY 2000 RESEARCH Medicare SPENDING 6% Private 31% *Includes those with other coverage, primarily Medicare. Source: Fleishman, J., Personal Communication, Analysis of HCSUS Data, January 2002. 2 3 The Kaiser Family Foundation | HIV/AIDS ISSUE BRIEF May 2004 Many people with HIV/AIDS obtain their financing for care Medicaid than whites (59% and 50% respectively, compared through multiple sources. For example, approximately 15% of with 32% of whites). Minority Americans with HIV also are those with Medicaid coverage also have other sources of cover- more likely to be uninsured than whites (22% of African age, primarily Medicare. About 12-13% of people with Americans and 24% of Latinos compared with 17% of whites). HIV/AIDS in care are estimated to be dual Medicaid and Whites with HIV have the highest rate of private insurance Medicare beneficiaries (called “dual eligibles” or “dual enroll- across all racial and ethnic groups (44%).