Options for enhancing quality and equity in the CARE Act: If not Medicare, then what?

1. Options for enhancing quality and equity in the CARE Act: If not Medicare, then what? Jeffrey Levi, Ph.D. American Public Health Association Annual Meeting November 8, 2004

2. Overview • Role of Medicare in HIV care financing • Potential for new Medicare prescription drug benefit to provide some relief to ADAPs • Alternative options to address combination of quality and equity in providing/financing HIV care reflected in all the presentations from this panel

3. Medicare eligibility and coverage • Eligibility • Over 65 • Long-term disabled • Past efforts to change this restriction • End-Stage Renal Disease • No income restriction • Coverage • A: Hospital insurance (inpatient, SNF, home health, hospice) • B: physician services, outpatient hospital services, labs, medical equipment and supplies • C: Optional managed care • D: Prescription drug benefit in 2006 • Current dependence on out-of-pocket, Medicaid, and ADAP

4. % of those with HIV in care Dual eligibles: 12-13% Medicare only: 6% HCSUS 1996 data Most long-term disabled Second largest public program: $2.6 billion in FY 2004 RWCA: $2 billion Medicaid: $5.4 b. (federal) Spending at slower rate of growth than Medicaid and Ryan White Impact of delayed/averted disability Aging of HIV population impact in out years Why Medicare and HIV?

5. Medicare Modernization Act • New prescription drug benefit effective 2006 • Prescription Drug Plans (PBMs): beneficiaries choose plans who have flexibility in determining formularies • Cost: • $35/month premium • $250 deductible • 25% between $250-$2250 in costs • 100% between $2500-$5100 (the “donut”) • 5% above $5100 • Dual eligibles (2/3rds of HIV+ on Medicare) • No deductibles or premiums for “average cost” plans • No “donut” payments • Small copays (<100% FPL = $1/$3; >100FPL = $2/$5) • NO Medicaid supplement of benefits • Some subsidies for those up to 150% FPL regardless of Medicaid status

6. Medicare Rx benefit (2) • Impact on CARE Act – ADAPs • ADAPs can help with cost sharing (premiums, deductibles, and copays) • ADAP contributions do not count toward the catastrophic limit (i.e., toward meeting the “donut” requirement), but State Pharmacy Assistance Plans can • “Savings” to ADAP for Medicare beneficiaries may be limited to the first $2250 of costs (where ADAP would only pay $250 deductible plus 25% of next $2000) • Formulary limitations?

7. Conclusion re Medicare Rx benefit • New prescription drug benefit may help those already on Medicare • Those very poor will also be able to stay on Medicare for prescription drugs • Those near poor on Medicare who cannot afford to pay for the “donut” will be back on ADAP roles and may never get back on the Medicare benefit • Net result: modest (?) relief for ADAPs

8. Would broader access to Medicare help? • Prescription drug benefit makes this alternative more attractive, but still would require strong ADAP • Institute of Medicine Committee on the Public Financing and Delivery of HIV Care • Looked at 5 options • Expand RWCA • Extend Medicare to all individuals with HIV • Extend Medicaid to more individual with HIV • Block Grant to states • New Federal HIV entitlement program administered by the states

9. What problem did IOM try to address? • Differences in access (eligibility) • Differences in services packages • No national quality standard within the program • Where you live determines what you get • Solution chosen by IOM: • Federally funded entitlement for core services administered by the states

10. IOM’s Criteria for Equitable HIV Care • Minimum, uniform eligibility standard (250% FPL) so all receive recommended services regardless of where they reside • Benefits that meet the standard of care for HIV • Adequate provider reimbursement • Financing mechanism that is sustainable and stable • Integrated and coordinated services

11. Is a new/expanded federal entitlement likely? • Current budget situation • Current executive and legislative branch skepticism about new entitlements • In a different political context, focus would be on insuring all who are poor, not just those with one disease

12. Can the CARE Act meet IOM’s criteria? (1) • Uniform eligibility and core services • IOM’s core services not dissimilar to what most consider core for a chronic disease approach • Challenges of transitioning within the CARE Act • Create a national minimum standard for ADAP and other services with enforced co-payments above minimum standard • Distribute $ based on ability to meet core services • Demonstrate ability to meet core before going beyond. • Formula + supplemental $ for helping those unable to meet minimum • Require coordination of funding streams

13. Can the CARE Act meet IOM’s criteria? (2) • Current CARE Act reimbursements often higher than Medicaid and often a disincentive to highlight payer of last resort requirement • Financing has been stable, but has not kept up with growth in demand • Integrated and coordinated services • Challenge of multiple funding streams • Can this be done without new resources? • Impact of “redistribution” of dollars

14. The Delivery System

15. Delivery System Questions • If our goal is a uniform minimum, more coordination will be needed among titles • A jurisdiction will need to see total CARE Act funding as the starting point. How is this enforced? • Related issues critical to success: • How do we eliminate/reduce the silo-effect at the provider and client levels? • How do we integrate treatment and services for HIV and co-morbid conditions? • What is the impact of integration of prevention into primary care?

16. Summary • Medicare prescription drug benefit will not bring significantly broader access to entitlement programs • Many of the IOM’s criteria, especially regarding creation of equitable access across the country, can be achieved within the current CARE Act structure, with some modifications that may be challenging to implement. • Adequate funding to assure equity is not guaranteed in the current structure.