Medicaid and Medicare: Ripping Holes in the Safety Net
"Of all the forms of inequality, injustice in healthcare is the most shocking and inhumane."
Some forty years since these words were spoken, the United States remains the only Western industrialized country that hasn't found a way to provide healthcare to all its citizens. Although government programs like Medicaid and Medicare have done an admirable job of serving vulnerable people, they remain part of a fractured system with many gaps.
Tax cuts benefiting the wealthy, war spending, and a sluggish economy are increasing the national debt while decreasing our ability to pay for health care. At the same time, the cost of care is rising considerably. In 2002, healthcare costs increased by 8.3%, the highest since 1991. These increases, coupled with less available funding for healthcare, have caused cutbacks and restrictions in the programs that people depend on for life prolonging care. (See ADAP article.)
As of 2003, 45 million Americans were uninsured, with millions more under-insured. Rates of those without health insurance are higher among people of color. In 2002, 14.2 percent of whites were uncovered, while 20.2 percent of African Americans lacked insurance as did 18 percent of Asian and Pacific Islanders and 32.4 percent of Latinos. Most of the uninsured are working, suffering from a long-term trend of fewer employers offering health coverage. Even those who have employer-based insurance are hurt by the trend toward fewer options and less generous plans, leading to burdensome out-of-pocket costs.
Why Should We Worry About Health Care?Strained systems of care are even more problematic for people with life-threatening illness. People with HIV not only need access to healthcare, but also need to see an HIV specialist in order to maintain overall health and may need other specialists for disease complications. Combinations of expensive medications are needed to treat HIV disease as it advances. Without comprehensive, affordable healthcare, including an adequate prescription drug benefit, people with HIV will lose health and eventually face death.
About a third to a half of people with HIV are estimated to be in medical care, and only about a third of those have private insurance. Between 70 and 83 percent either depend on public programs or are uninsured. Half depend on Medicaid and Medicare. It is public programs that are most clearly showing the increasing strain as they suffer cutbacks and restrictions. In order to ensure that we can advocate for these programs, it's important to understand them.
Medicaid and MedicareMedicaid is the largest public payer of HIV care, serving about 55% of people living with AIDS and 90% of HIV-positive children. Medicare follows second, spending $2.6 billion in federal funds in 2004, compared to Medicaid's $5.4 billion. Many people are understandably confused by the difference between the programs and unclear about their coverage. Adding to the confusion, over 50,000 Americans living with AIDS qualify for both.
Medicaid and Medicare are entitlement programs, meaning that those who qualify must receive covered benefits. However, Medicaid is a joint program run by the federal government and the states, and each state has great flexibility in whom it serves and the benefits it provides. Medicare, on the other hand, is a uniform federal program. For full descriptions of Medicaid and Medicare, visit the Kaiser Family Foundation Web site at www.kff.org.
Medicaid EligibilityMedicaid is the safety net healthcare program that serves three main groups of low-income Americans: parents and children, the elderly, and the disabled. In order to qualify, people must fall into a specified category. There are over 25 categories falling into five broad groups: children; pregnant women; adults in families with dependent children; people with disabilities; and the elderly.
Most people with HIV enter Medicaid through disability. In general, the state is required to use the disability criteria established for the Supplemental Security Insurance (SSI) program, but can choose to use a more restrictive definition. To qualify, an individual has to have a severe "medically determinable physical or mental impairment" and be unable to engage in any "substantial gainful activity." These determinations can take a long time and require a lot of paperwork. Even though people with HIV can qualify for presumptive eligibility, meaning they get faster access to benefits, in most states, they have to document one or more of a specified listing of opportunistic infections, cancers, or conditions.
To qualify you must also meet income and asset requirements, which are set by the state and can differ widely state by state and within state by category of beneficiary. Because states set many financial requirements, in good economic times they may choose to invest in health and cover more people. However, when times are difficult, states can change eligibility requirements, leaving some without healthcare.
Eligibility is different for immigrants, however. Undocumented immigrants are not eligible. States can cover legal immigrants residing in the country before August 22, 1996 if they meet all the other requirements. Most legal immigrants who entered the U.S. after that date have to wait five years from their date of entry and live in a state that chooses to cover them. In addition, you must be a resident of the state offering the Medicaid coverage.
Medicaid BenefitsThe Medicaid benefits package is broad and flexible. Sometimes that works in favor of the beneficiary, allowing benefits tailored to need. Unfortunately, in difficult budget times, states can also cut back on essential benefits. States must provide minimum mandatory benefits, but have broad discretion regarding optional benefits. Although federal law prohibits states from imposing cost sharing (the amount that someone must pay to get service) on some groups of people who are eligible for Medicaid (beneficiaries), they can require it for other groups for specific services. Cost sharing must be "nominal" and is not supposed to create a barrier to care.
Medicaid benefits are divided into two categories: mandatory and optional. There are twelve mandatory service categories and a range of optional categories. For example, physician visits, lab and x-ray, and hospital in-patient are considered mandatory services, while prescription drugs, targeted case management, and personal care services are considered optional services. Notably for people with HIV, prescription drugs fall in the optional category. However, all states cover prescription drugs and some additional optional services.
Each state has the discretion to limit the scope of services, although it must comply with some federal rules regarding benefits. For example, the state can't discriminate by limiting services based on a particular diagnosis, type of illness, or condition. People who are eligible for Medicaid are also entitled by federal law to get services that are medically necessary, although what this means can vary state to state.
Medicaid is a comprehensive safety-net healthcare program, and it is also complex and varies widely from state to state. Understanding your state program generally requires help from either an experienced benefits counselor or case manager. One way to begin to understand your state Medicaid and its services for people with HIV is to visit www.atdn.org and click on The Access Project. You will find a synopsis of your state program and contact numbers. You can also call the Project Inform hotline at 1-800-822-7422 for a referral to a benefits counselor in your area.
Medicare EligibilityMedicare is a federal health insurance program that covers the elderly and permanently disabled. Most people over 65 are automatically entitled to Part A of Medicare (Hospital Insurance Program) if they or their spouse are eligible for Social Security payments.
Most people with HIV qualify through disability. In order to qualify, you must have worked for a specified period of time, established disability, and completed a two-year waiting period. Generally, if you receive Social Security payments, you are eligible after the two-year waiting period.
There are no income or asset requirements. Medicare serves anyone who is eligible regardless of previous health history.
Medicare BenefitsMedicare provides broad coverage of basic benefits but doesn't provide long-term care and currently has no prescription drug coverage. As of 2006, the new Medicare prescription drug benefit will provide some coverage for beneficiaries. Until January 2006, beneficiaries are entitled to a prescription drug card that allows them a discount on some drugs.
Part A provides inpatient hospital services, skilled nursing facility (SNF) benefits, home health visits following a stay in the hospital or SNF, and hospice care. Part B is voluntary and covers physician and outpatient hospital services, annual mammography and other cancer screenings, and services such as laboratory procedures and medical equipment.
Medicare also has a managed care option called Medicare + Choice. Those plans provide both A and B services to beneficiaries.
Unlike Medicaid, Medicare is administered by the federal government, so it doesn't have the wide variance that Medicaid does. Medicare also offers a higher reimbursement to providers, making it easier for beneficiaries to find providers. However, it also has relatively high cost sharing obligations that can be difficult for beneficiaries.
In addition, the prescription drug card that is currently being offered to beneficiaries is confusing and difficult to use. Many people haven't taken the option due to lack of knowledge and, for some, the discounts offered don't represent a significant savings.
Dual EligiblesOver 50,000 people living with HIV are eligible for both Medicaid and Medicare (dual eligible). Most dual enrollees are people with very low incomes and substantial health needs. Medicare covers basic health services for this population, but Medicaid is essential because it pays Medicare cost sharing, including the Part B premium, which amounts to over $700 annually. It also covers services that Medicare doesn't, including long-term care, vision, dental, and, until 2006, prescription drugs. Once the Medicare prescription drug benefit is implemented in 2006, dual eligibles will lose their Medicaid prescription drug coverage.
Life-Saving Programs Under AttackThe environment for the provision of healthcare has changed dramatically during the Bush Administration. It has always been challenging to protect services, particularly for low-income people, but the last four years have signaled that the administration would like to place restrictive limits on healthcare provision. There has been an active move to end the entitlement status of Medicaid as well as cut funding to the program. Although Medicare is more protected from the attempts to restrict services because of its role of serving more politically powerful seniors, the much touted prescription drug benefit, which will provide some relief, also carries great risks for most people living with HIV.
What's Happening in Medicaid -- The Federal LevelThe federal government matches state Medicaid spending with the Federal Medical Assistance Percentage (FMAP). FMAP, or the federal percentage, varies state to state and can be anywhere from 50 percent of overall spending for higher income states to 77 percent for lower income states. Matching rates can be higher for some services or programs. It is an open-ended match, meaning that as long as the state spends to provide services, the federal government matches that spending. This allows states to incorporate new technologies and drugs and respond to emerging epidemics and downturns in the state economy that lead to job and insurance loss.
In the past couple of years, the Bush Administration has tried to cap federal spending through a block grant or a set amount of money that would go to each state. The only way the state could respond to any program growth would be by spending state money. People with HIV and many others would suffer greatly under the enactment of block grants, likely losing services and even eligibility. Fortunately, Congress and governors have been concerned about the idea of block grants and the proposals have stalled.
In 2003, in recognition of states' fiscal crises, Congress passed a temporary increase in the FMAP, which ended in June 2004. Forty-two states reported that the increase helped with their Medicaid increases, 27 reported that they avoided, postponed, or minimized program cuts, and all reported that the end of the increase will bring challenges. Legislation has been introduced that would renew this temporary funding.
What's Happening in Medicaid -- The State LevelSince 2001, states have been experiencing various degrees of fiscal difficulty. For the past three years, growing Medicaid spending has been a target for states trying to balance budgets. In spite of the temporary increase in FMAP, 49 states started 2004 with plans for Medicaid cost containment and 18 planned mid-year cuts or cost containment measures. For people living with HIV and others, these measures can mean the loss of life prolonging comprehensive care. For example, Mississippi cut eligibility in a move that could mean that up to 65,000 disabled and elderly lose their coverage.
For advocates, fighting cuts at the state level has become a critical part of protecting Medicaid programs for people who need them. We also have to monitor waivers. States are allowed to submit waivers to the federal government that would remove some beneficiary protections, establish cost sharing obligations, allow changes in benefit packages, and make other important program changes. Waivers are often enacted with an eye to cutting or containing costs. When cutting costs is the primary goal, the outcome is likely to hurt people's healthcare. The waiver process is typically long and bureaucratic, but it is essential to follow and provide input.
What's Happening in MedicareThe most significant gap with Medicare coverage for people with HIV has always been the lack of a prescription drug benefit. The Medicare Modernization Act provided a drug benefit for Medicare that will be implemented as of January 2006. Unfortunately, the benefit was funded at significantly less than what would be needed for complete coverage. In addition, the pharmaceutical industry lobbied successfully to include a ban on the federal government's ability to negotiate the price of drugs provided by the benefit. Therefore, the benefit will have restrictions that could compromise care.
The Medicare prescription drug benefit has many potential problems. The concerns that are most pertinent for people with HIV are included in The Medicare Prescription Drug Benefit -- Issues for People Living with HIV/AIDS. You can view this document at www.projectinform.org/tan/0408mcpoints.html. Advocates are insisting on the creation of sufficient information for consumers to help them understand and utilize their benefit, implementation of a sufficient appeals process, and assurance that the formularies (lists of available drugs) are inclusive of necessary medications.
The regulations that will govern the benefit were in the public comment period until October 4th. The HIV Medicaid and Medicare Working Group, made up of national and regional HIV/AIDS organizations, issued comments and provided information to help other interested individuals and groups submit comments as well. To get more information on Medicare benefit advocacy, visit the HIV Medicine Association (www.hivma.org). To join the Work Group, email Project Inform's Treatment Action Network (firstname.lastname@example.org) or The Access Project (email@example.com).
Medicaid and Medicare are the backbone of HIV care. They are also the only attempt in the U.S. to provide healthcare for low-income and vulnerable populations. We can't allow the work of the last 30 to 40 years to protect the health of Americans to be rolled back due to misplaced political priorities. People with HIV and their advocates have to understand and fight for the programs we depend on.
Anne Donnelly is Public Policy Director of Project Inform in San Francisco.
This article was provided by AIDS Community Research Initiative of America. It is a part of the publication ACRIA Update. Visit ACRIA's website to find out more about their activities, publications and services.