The Next Wave in AIDS Care: Reauthorization of the Ryan White CARE Act 2005-2010

Other Options Considered

Before reaching its final recommendation, the IOM committee analyzed a number of other options and decided in each case that it would not meet their criteria for an acceptable solution. Below are the options the IOM committee considered and the reasoning on why each was rejected.

1. Expand the Ryan White CARE Program by Increasing Annual Appropriations So That All Titles of the Program are Able to Provide Medical and Social Services to Low-Income Individuals With HIV

This option would have the advantage of building on an established system that has a built in component for addressing local needs. However, because it is a state-based program, it does not have uniform eligibility standards or a uniform benefits package including a standard minimum drug formulary. The CARE Act also is a discretionary program that is subject to the annual appropriations process so it would not be a guaranteed funding source. Increasing funding for the program also does not address the current disparities that exist in the allocation of funds.

2. Expand Medicare Eligibility to People With HIV

This option would be modeled after the program for individuals with end-stage renal disease. The benefits of a Medicare expansion include:

• It is a national rather than state-based program and coverage would be provided without requiring disability and without a 24-month waiting period.

• Medicare physician reimbursement rates are considered adequate.

• It would provide a stable funding source that is not subject to the annual appropriations process.

• Efficient administrative systems and data collection are already in place.

However, because it is not a means tested program, using Medicare would grant eligibility to all people with HIV regardless of income. Also, due to Medicare's financial constraints (financial solvency projected until 2026) is it is not feasible for the program to support universal coverage for people with HIV.

A significant disadvantage of providing access to healthcare services to people with HIV through Medicare is its limited benefits package that does not include case management and, until January 2006, will not include prescription drug coverage. Even in January 2006 it is still unclear whether the coverage available will support the standard of care for people with HIV. Furthermore, the plan requires high levels of cost sharing for individuals between 150 and 250 percent of federal poverty, including a gap in coverage that leaves individuals with no coverage between $3,600 and $5,850 in drug expenses.

3. Budget-Neutral Medicaid Expansion

Several states have applied for Section 1115 waivers to expand Medicaid to individuals with HIV before they become disabled. This proposal would standardize and facilitate this process through a number of mechanisms: require standard eligibility requirements across states; require standard benefits packages; and ease the budget neutrality requirement. However, under this proposal there is no guarantee that all states would apply for expansion waivers or implement the standard packages. Additionally, it does not address the provider reimbursement issue that is a significant barrier to healthcare for Medicaid beneficiaries. It also would rely on a state/federal funding partnership leaving the program subject to state fiscal pressures.

4. Create an Optional Medicaid Eligibility Group

This option would allow states to offer Medicaid coverage to people with HIV before they become disabled and is modeled after a state option that allows them to offer eligibility to low-income individuals infected with tuberculosis. Additionally, it would allow states to provide coverage to people with HIV before they become disabled without meeting the budget neutrality requirements of a Section 1115 waiver. However, it still relies on the current Medicaid benefits and reimbursement structures that vary greatly from state to state, as well as relying on states to contribute additional funds without an incentive to do so.

5. Create an Optional Medicaid Eligibility Group With Increased Federal Matching Funds

This option is similar to options 3 and 4 except that it would entice states to offer coverage to this group by offering increased federal matching funds (ranging from 65 to 84 percent) for services provided to this population. However, it still does not address the disparities that exist with regards to benefits and reimbursement rates, and even with the increased match it leaves the population vulnerable to state fiscal pressures.

6. Federal Block Grants to States for HIV Care Similar to State Children's Health Insurance Programs

Under this option, states could elect to receive a block grant that would be determined based on the number of people with HIV in the state and the estimated cost of providing healthcare services to this population. States would be required to match federal funds but the federal government would pay for 65 to 84 percent of the cost of care. This approach would allow states to enhance a number of components that are not adequate in many Medicaid programs, including benefits packages and reimbursement rates, and grants states the flexibility to develop innovative HIV delivery systems such as Centers of Excellence. However, this approach would not guarantee a uniform benefits package; would allow states to cap enrollment if they exceed the block grant funding; and would not guarantee participation by all states.