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HIV and Personal Finance

Where Do We Go From Here?

September/October 2003

HIV and Personal Finance: Where Do We Go From Here?

In the early 1990s, HIV was seen as a one-way street to all the "d-words" -- disease, disability, and death. This emboldened viatical settlement companies to buy life insurance policies from people with HIV at prices near 90 percent of their face value. Low t-cells alone assured social security disability approval. People bought credit card life and disability insurance, often running their credit up. Investment was shunned or used like a last-chance game of chance. The will became the legal document of the day in order to safeguard interests after death.

In the new millennium, however, HIV has become a two-way street. Disability can now be a time-out, a refuge from downsizing companies, a chance to reskill and redirect one's life. Viatical settlement has been shoved aside by accelerated payouts of life benefits. Disability is still granted but often on the basis of medication side effects and the depression that can accompany long-term survival. Bankruptcy laws are being tightened. Investment and retirement are new concerns. And the legal document of the day is the living trust in order to safeguard interests during life.

All these shifts have left people with HIV with many left-over, no-longer-relevant and possibly dangerous ideas about personal finances. That's on top of widely published advice in money magazine that is downright misleading when HIV is in the picture. Let's pick our way among the land mines and opportunities generated by all this.


Dwindling Medical Insurance

The HMO-ization of America is now complete. I was trained as a HMO director at the Wharton School in an experimental program sponsored by the Robert Wood Johnson Foundation in 1976. I saw then what we experience now: the only way to cut costs is to cut service and pass on costs to consumers.

New York state has the best insurance laws in the US, laws so consumer protective that many insurers set up one company for the other 49 states and may refuse to even practice in NY. These legal protections have spawned continual efforts by insurers to recoup their resulting high costs. Co-payments have skyrocketed, especially for the brand-name drugs HIV requires.

In the '90s I advised that in these times the benefits tail must wag the employment dog: secure benefits may be more important than high salary or satisfying jobs. Employers are going bankrupt. Singles are being targeted in employer downsizings. AIDS Drug Assistance Plans (ADAPs) are in retrenchment. HIV medical practices are closing down and out-of-pocket costs for treatment are rising. Dollar maximums on medical policies converted from COBRA coverage are being hit.

Retiree benefits are under attack. This hits people on Medicare because of disability hard because once on Medicare you cannot purchase individual medical insurance. This can force people to impoverish themselves to qualify for Medicaid, adding financial insult to medical injury.

For people with HIV in New York and New Jersey there are three key protections: individual insurance is priced the same for everyone (community rating); continuity of coverage enables (non-Medicare eligible) people to go from one health plan to another; and, people can keep individual medical insurance in force to pay for pharmaceuticals even when going onto Medicare because of disability.

Preserving private medical insurance benefits is key to preserving financial security. The ADAP Plus Insurance Continuation (APIC) program pays insurance premiums for those with incomes up to $44,500/year and assets under $25,000. In addition the AIDS Housing and Information Project (AHIP) has a lower income limit of under about $15,000 a year and it has no asset limit. Get on these programs now to be "grandfathered" (i.e., remain included) later when the real crunch comes!

When major illness strikes, medical insurance becomes the greatest asset; worth far more than a condominium, investment portfolio or 401(k) retirement fund. Medical insurance is not a place to skimp. Especially with low income and assets, the best medical coverage is needed to withstand the onslaught of non-reimbursed expenses and payment delays.

With long-term survivorship many NY area people with HIV are tempted to become snowbirds and move to warmer climes. This can prompt individual insurers to cancel coverage, since in the past ten years medical insurance has become geographically bound. Insurers would like nothing better than to cancel coverage for moving out of this geographic area. If a person is on Medicare because of disability the situation is worse since you cannot buy individual medical insurance once you are Medicare eligible, which is 29 months after social security disability income payments start.

Unraveling Safety Net

The worst advice ever given anyone with HIV in New York is to give away assets to go onto Medicaid. A bad economy and conservative administration have combined to cut Medicaid funding, tighten eligibility, and restrict federally mandated benefits. The social safety net is full of holes.

The administration has even cut back that hitherto sacred cow, Veterans' Administration (VA) benefits. On January 17, 2003, the feds suspended further enrollment of non-service-connected veterans with income over the levels used by the Department of Housing and Urban Development as the upper limits for housing assistance eligibility. This was justified because VA health enrollment has nearly tripled in recent years as veterans grew older and learned of the VA's prescription drug coverage.

However, if you have a low income and had military service, you may be eligible; if so, you should apply immediately. This is especially true if you anticipate your income may rise in the future. Many government programs have a tradition of grandfathering in people who had enrolled but whose circumstances improve later.

The funneling of federal funds into Pentagon budgets, the aging of our population, and the shift of baby boomers from funding public benefits to receiving them all are shredding society's safety net.

Other illness groups are learning how people with HIV managed to gain federal priorities in funding, and they are now competing fiercely for fewer dollars. The rise of faith-based social services and the rise in power of conservative religious people in policy-making positions makes the prospects for the safety net very poor.

Threatened Disability Benefits

Disability benefits are threatened not because people are more able to work, but because insurers had expected people with HIV to die and are now squeezed financially from many factors. Insurers with already bad investment records have been devastated by stock market losses where 95% of all stocks have fallen. Disability insurers have also collapsed because of terrible underwriting decisions in the '80s resulting in many claims from high-income doctors and lawyers. People with HIV have now been experiencing the sudden cancellation of benefits, offers of piddling buyouts, and reviews of doctor records for evidence that the patient stated that he or she "feels good."

Lastly, many policies from the '80s were tacitly designed to be underwritten (screened) at the time of a claim and not at the time the policy was written. These are claim disasters waiting to happen. The distinction is important. If insurers are after people with HIV because they think they're cured, that may be a losing battle. If insurers are trying to reduce claims, it means those who take the proper measures to defend their claims may be able to defend them.

Since the early '90s the only way to get disability coverage is through employment. The good news is that insurers have introduced "portable" coverage in the NY metro area, especially among financial institutions. This is insurance that you can convert to individual coverage without medical underwriting if you're terminated. It's a bit expensive, and deducts what Social Security would pay, but it's better than nothing.

The truth is that despite Social Security's publicized "Ticket to Work" program there has been no change in Social Security Disability (SSD) criteria for disability with HIV. That would require hearings just as it did in the early '90s.

Survivorship has re-introduced long-term dimensions into the financial decisions of people with HIV. With disability, time is the great eroder of income and assets. People on disability only get cost of living (COL) increases on the Social Security part of their income. If half your income gets no COL over ten years, that income has less purchasing power.

People on disability theoretically have far more time than working stiffs to upgrade skills, especially since programs like the New York State Vocational and Educational Services for Individuals with Disabilities (VESID) Program are more than ready to pay for even multiple training programs. But in practice this takes enormous self-motivation, which can be compromised by HIV's fatigue and unpredictability.

Today's work world is increasingly technological, and technology is evolving ever more rapidly. A disability time out may work to recoup health, rebuild skills, and redirect life. Many have discovered new avocations far more satisfying than salary-focused vocation. But long-term disability can become equated with becoming obsolete in the work force and becoming sidelined in work-obsessed America.

Many who sold life insurance counted on the stock market to carry them forward. The market's betrayal of everyone has hurt those on disability far worse since they do not have good work prospects to rebuild those lost assets. They may not have the same timeframes to weather the storm until things rebound.

Just about the time it was clear that new treatments were restoring longer life expectancies, leading people with HIV to think about longer-term investments such as having a home, the market crashed and money has rushed into real estate inflating prices. Buying-in now would be highly risky.

When illness results in a fall from one's previous place in society, the adjustment is fraught with peril. When this happens in a culture that prizes work and money above all else people on disability are doubly disadvantaged.

HIV and Personal Finance: Where Do We Go From Here?

Unpreparedness for Senior Years

Near-normal life expectancies among people with HIV mean that aging is again the enemy. Yet people with HIV on disability left work with their financial foundations incomplete. Even if they had surplus income, people on disability can't save for the future tax-free. The new Bush savings plans, unlike the old Roth IRAs, can be funded with unearned disability income. While these savings may grow tax-free, they're a far cry from pensions and tax-deferred income plans where employers match their funds.

Retirement is the gaping hole now facing people with HIV. Disability incomes stop at age 65. Even social security payments may be lower for people with HIV due to underfunding. The senior years trigger the necessity to plan for long-term care, but people with HIV cannot get long-term care insurance. Even if they could, the premiums are very high and the coverage unregulated. But having HIV increases the likelihood that the illnesses of later years may occur earlier and harder.

The New Basis for Disability

The basis of going on disability has shifted from lab measures and opportunistic infections to medication side effects and long-term HIV-related conditions, including: hepatitis C and the harsh side effects of its treatment; possible medication-related stroke and heart conditions; and HIV-related depression. Especially with good long-term prospects, the idea of a disability time-out may be a good short or medium-term solution. This is especially true where side effects or symptoms may have resulted in poor performance in a company that's about to downsize, be merged, or go bankrupt. Disability benefits are a good life raft to reach a new safe work haven.

New Cash From Life Insurance

The sale of life insurance has been replaced by the acceleration of life insurance. Simply put, HIV sales dominated the viatical market during its many scandals. Many investors got burned. Most of those investors today won't even deal with a company that sells policies from people with HIV. The entire industry fled HIV to buy policies from seniors. They even changed the very name of the process to "Life Settlement." Yet viaticators have not yet caught on that that going from 2-to-4 year life expectancies among people with AIDS to 8-to-12 year limits among seniors is even more risky and subject to abuse. When it does people with HIV may be back in vogue, since they're easier to market to.

While some brokers still advertise, sellers need to be aware that illegal practices still abound and a seller may become embroiled in an investigation. In particular, anyone who obtained a policy by lying on an application should be aware that buyers are obligated in many states to report that to the law.

Fortunately, there is an alternative. Many group policies now carry a Living Benefits or Accelerated Death Benefits (ADB) clause. This permits a person with advanced HIV to apply for a payout of the death benefit. Insurers seem motivated to do this, since insurance sales are down and an ADB is a sales plus. Offering and granting ADBs for them demonstrates to clients that they are an alternative to viatical settlement. Insurers hate viaticals if only because they never let policies lapse whereas the average policy lapses in just seven years. All that's required on many applications is a doctor's signature. Many insurers check only that and don't do medical reviews.

New Benefits From Relationships

Domestic-partner benefits have truly taken over the Fortune 500 and many nonprofit employers. Likewise, many states and municipalities are trying to offset the legal advantages of marriage that have penalized unmarried couples. This is a life saver, especially for people with HIV who are already Medicare eligible but who need private insurance to pay for drugs.

However, what can so easily be done can easily be undone. Partners seeking solace from loss and long-term loneliness need to recognize that these patchwork measures must be used carefully with professional guidance from both benefits/insurance/financial specialists and partnership agreement attorneys. This is especially true in real estate unions. Search NOLO.COM for its many self-help legal guides, which have specialized now for nearly 20 years on unmarried relationships.

With long-term neurological impacts HIV is ever more a disease of competency. With financial support coming from a delicately organized network of sources, it's important to maintain clear lines of control. It's important to arrange powers of attorney to provide for situations where help is needed to write checks, deal with authorities, or ensure premiums are paid.

For unmarrieds or people with complex family relationships, a will can be inadequate, leading to probate delays and nightmares. Yet, with longer life expectancies, people with HIV may put off even will making. One reason may be because wills aren't very useful to us while we're alive.

Those concerned about maintaining a quality of life should consider not only powers of attorney but a living trust as a means to provide seamless means of control that will handle all the kinds of situations that can crop up with serious illness.

A trust provides instructions and control if families contest competency. It may help protect against family will contests. It guarantees that someone competent of your own choosing is always in control, and may minimize the delays and fees of probate. Beware the cheap will! It may camouflage a lawyer looking to handle a fee-lucrative estate.

New Opportunities in Entrepreneurship

Since individual disability insurance is impossible for people with HIV, group disability insurance becomes key. What better way to get this and other long-term, catch-up retirement benefits than having one's own business? I've written extensively on the attractiveness of entrepreneurship for gay people and others who may face severe discrimination in their later years in employed positions. (See my Web site,, for some of these.)

Longer-term prospects make possible the many years needed to build the skills and experience for one's own business and then make it successful. Not everyone is suited for such self-discipline and sacrifice, and the failure rate of small businesses is high. But a niche business well suited to one's experience, skills, and passion ranks right up there among life's securities and pleasures. This is especially true in today's corporatized, de-humanized jobs.

When you have many clients, you can be fired by one and yet survive and even thrive. Having seen how frail life is, the risks of entrepreneurship may pale by comparison. Motivation and focused desire are key to success, and these are also a natural byproduct of fighting serious illness. It's important not to thwart these desires but to re-schedule and perhaps re-channel them. This may, in fact, be a good time to take an inventory of your interests through testing and profiling then using the results to reprioritize and plan.

New Ways to Return to Work

The biggest problem is leaving the hard-won security of disability and public benefits for the uncertainty surrounding work today. Most disability policies will put people back on claim within six months of going back to work, but new workplace coverage may not take effect until twelve months on the job.

People who've run the HIV gauntlet may not be satisfied with just a job. When you've looked death in the eye, you may want the meaning or enjoyment of a career. You may need a job with flexibility and security that can tolerate the ups and downs of this disease. Yet, getting a job in today's post-dot-com world is tough even with perfect health. Consider the following:

  • The world of work has radically changed and the degree of change is increasing.

  • Unemployment is up, companies are cutting back, downsizing has become fashionable.

  • Youth are seen as cheap to hire and easily managed, adaptable, with recent skills.

  • Long-term survivorship may be accompanied by deterioration of skills and assets.

Returning to work is too complicated a subject to cover here. However, my previous series of articles for Body Positive on returning to work (see box below for details) shows how to assess what benefit protections are absolutely needed and where risks can be taken. The series helps readers weigh factors such as drug resistance, treatment trends, and unpredictability of symptom outbreaks. It also outlines how to get funding for re-skilling, how to determine new career directions, and how to tradeoff and balance work wants with medical needs. It spells out how to use networking, rewrite resumes, and research industry opportunities.

Lastly, it deals with resume gaps, invasive interview questions, legal protections, and practical tactics for getting a job interview and offer and for settling safely into a new job.

Benefits obtained through work are key; benefits at the outset may in fact be more important than salary. Ten years ago I advised to get a job with benefits to make a disability timeout possible to build a life dream. Today a job may be key to generating the experience and skills necessary to make that life dream a reality.

Postscript: Financial Advice Must Adapt

As long as a decade ago, I was cautioning that many financial planning tools were inappropriate for people dealing with serious illness. For starters, 90 percent of financial planners may have a conflict of interest if they get their income by putting people into commission-generating investments or push their brokerage's own funds. People with HIV may need to protect capital, not gamble on stocks. They may need nonprofit mutual fund families like Vanguard and TIAA-CREF rather than brokers.

HIV in the '90s dictated a focus on how to get people on disability successfully, get cash by selling life insurance, solve cash and debt problems, and postpone tax claims. In the 90s I had to change the way financial advice was delivered. I minimized meetings because they were expensive and draining. I found people prefer to telecommute and handle questions singly by phone. I saw that bound financial plans produced by computers using general rules and assuming good health were worse than useless. I realized that employment benefits often turned out to be more important than assets such as investments and real estate.

In the new millennium all these changes continue to be relevant. But now we need to focus on career -- our money machine -- in order to stop the drain of inflation. We have to apply for grants to get new skills for possible new jobs. We have to fight dirty insurer practices to keep claims secure. We have to train doctors to understand the impact of their statements on disability determinations. We need to tap lawyers specialized in relationship agreements, apartment law, and trusts.

I've had to retool as a financial advisor and advocate for people with HIV over the last ten years because people with HIV now have new concerns and challenges. Make sure your advisors and helpers have changed with the times as well.

Re-educate yourself financially. Beware generalized pop money magazine advice. Start with a unique inventory of where you are now: your advantages and your problems. Insist that whoever you work with or rely on for advice apply guidelines geared to your unique situation. This area is complicated. But the key areas are few in number. And it's well worth the trouble.

Financial Dangers and Opportunities for People Living With HIV

The Dangers

  • Medical Insurance Dwindling. Medical insurance has become an even greater medical asset but one of dwindling value.

  • Safety Net Unraveling. The safety net now suffocates; public and VA benefits are under attack.

  • Disability Benefits Threatened. Squeezed disability insurers are squeezing insureds.

  • Skill & Asset Deterioration. Heightened change and competition and increased fluctuation and unpredictability devalues previous experience and investment.

  • Senior Unpreparedness. Age has resumed its traditional role as the enemy, finding people with HIV ill-equipped for retirement and long-term care.

The Opportunities

  • New Basis for Disability. The basis of going on disability has shifted to medication side effects and HIV-related conditions such as hepatitis C, cardiovascular conditions, and depression.

  • New Cash From Life Insurance. The sale of life insurance has been replaced by the acceleration of life insurance.

  • Relationship-Based Benefits. Security is being sought in relationship-based benefits ranging from real estate to domestic partner insurance.

  • Entrepreneurship Opportunities. Self-employment now competes with employment as the best source of benefits.

  • Return to Work (RTW) Possibilities. RTW is possible in theory but difficult in practice.

All these changes testify to personal finance stability and/or prosperity as a major treatment tool. As treatment options multiply, paying for them becomes key. Group and private insurance remain key in not adding financial insult to injury and illness. Now that physical survival has become a reality financial survival has become the next frontier.

More From Per Larson ...

Financial expert Per Larson has been a frequent contributor to Body Positive magazine. To read more about his views on personal finance for people living with HIV, you can access the archive of back issues at Web site "The Body" (

"'Dear Disability Diary': Steps Towards Keeping Disability Claims on Course"

"Hidden Pots of Gold"

"Life Beyond Disability"

"Keep Covered With Medical Insurance"

"The Road Back, One Step at a Time"

"Career Issues -- Getting Back In: A Two-Pronged Strategy"

"Career Issues -- Job Hunting: Hitting the Streets, Getting the Job, and Keeping It"

Author of the book Gay Money and over 125 articles, Per Larson has advised more than 800 people in the last ten years on the financial implications of serious illness. Readers can consult Per's older articles on his Web site or contact him at

This article was provided by Body Positive. It is a part of the publication Body Positive.
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