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Treatment Action Network Alert

Healthcare Challenges in President Bush's Second Term

December 2004

The last four years have seen employer-sponsored health insurance premiums increase by nearly 60% for family coverage and the number of uninsured Americans increase by almost four million people. During the same time, state Medicaid programs, serving low-income Americans, narrowly escaped attacks on funding and proposals to cap funding at the federal level and suffered from cuts and cost containment measures at the state level. The Ryan White CARE Act, including the AIDS Drug Assistance Program (ADAP), was virtually flat funded for the last several years, with small, inadequate increases going to ADAP.

The one bright spot, enhanced prescription drug coverage for seniors and disabled people covered by Medicare, came with problematic provisions that could dramatically decrease prescription drug coverage for more than 6 million of the sickest and poorest Medicare beneficiaries and will create gaps in coverage and affordability problems. It's been a challenging time for American healthcare and especially difficult for those who can't afford the rising costs of care.

The next four years look even more problematic. The Bush administration believes that it won a mandate in the election to move boldly forward on the President's priorities. Unfortunately, they do not include strengthening the healthcare system. A stronger Republican majority will be challenged to move Administration proposals quickly to prove that they can govern effectively with a majority in both houses and the Presidency. And many fiscal conservatives will be looking for savings to fund expensive initiatives and decrease, or at a minimum, stabilize the growing federal deficit.

As the Administration and Congress move forward on the President's top priorities including Social Security "reform," tax cuts, war and anti-terrorism spending, the unprecedented deficit will only increase. Leadership will be looking for ways to finance expensive initiatives; social security reform alone is expected to cost $1-2 trillion over 10 years. The biggest targets for "savings" or cuts are Medicaid and Medicare which together amounted to $473 billion in federal spending last year and will increase due to increased cost of healthcare and the Medicare prescription drug benefit. The benefit is currently estimated at $534 billion, significantly higher than the original estimate of $400 billion. Since Medicare has just been the subject of legislation and an enhanced benefit, it is unlikely that Congress or the Administration will look there for significant savings.

All of these factors leave Medicaid as the most likely target for serious cuts. Medicaid is the safety net healthcare program that serves low-income people, including more than 50% of American adults living with AIDS and 90% of children with HIV/AIDS. It serves low-income Americans who don't have the same political power that many Medicare beneficiaries wield. Medicaid has often been the target of political attacks.

On the other hand, Medicaid has passionate allies because of its essential role as a part of the social promise made to Americans. It is the backbone of public HIV care and serves 51 million low-income Americans who would otherwise be unable to afford healthcare. It has significant support among Congressional representatives who have fought for better healthcare and many governors who understand intimately its role in serving the health needs of some of their most vulnerable constituents. In the past, Administration proposals to cap the federal contributions to the program have stalled due to lack of support from Governors and opposition from health advocates and key Congressional supporters.

This year, however, the dynamics have changed, placing Medicaid in greater danger. It is likely that Congressional leaders will include Medicaid cuts and/or caps to the program in the budget resolution. The budget resolution is fiscal legislation that directs Congress on how much it can spend (including mandatory cuts) and mechanisms it can use to meet spending targets. The budget resolution can't be filibustered (a filibuster is a mechanism the opposition can use to hold a piece of legislation it deems harmful). This means that it could pass with 50 votes in the Senate. Ron Pollack, head of Families USA, one of the leading healthcare advocacy organizations in Washington, DC called this dynamic the "largest threat to public health in the history of our country."

As advocates, our job is to ensure that Medicaid cuts do not get included in the budget resolution. We will not be alone working on this important program. We have to reach out to Republican Senators who believe in this program and ensure that Democratic supporters understand the importance of ensuring that Medicaid cuts are not included in the budget resolution. To that end, the HIV Medicaid/Medicare Working Group is holding an educational event targeted at key Senators as one of the first activities of the new Congressional session. Families USA will also be working with people to educate elected officials, collect stories about people who depend on Medicaid and organize to fight Medicaid cuts.

Medicare, the program that serves seniors and people with disabilities who have sufficient work history, could also face challenges but it is less clear that it will be a target for significant cuts. However, for people with HIV/AIDS and others, there will be significant time and resource intensive administrative, and possibly legislative, challenges as we try to ensure that the enactment of the Medicare prescription drug benefit doesn't leave some less able to access comprehensive and affordable prescription drug coverage. The benefit will be implemented on January 1, 2006. For more information, go to

2005 is the year that the Ryan White CARE Act is scheduled for reauthorization. The CARE Act was first implemented in 1990 and is intended to fill gaps in healthcare and supportive services for people living with HIV/AIDS. Reauthorization is the process by which Congress affirms the need for a piece of legislation and can make necessary changes to provisions of the law.

Reauthorization this year will be complicated by the fact that Congress has become more conservative and many of the CARE Act's traditional champions either do not have as much influence or are no longer in a position to make Reauthorization their primary issue of concern. In addition, the CARE Act is under tremendous strains and even well meaning efforts to improve it could in fact hurt many of those currently receiving CARE services.

The CARE Act is a discretionary program, meaning we must fight each year for money to fund the program. It has never been fully funded and for several years has received virtually no increase in spite of a large increase in demand for program services. The increase of demand is due to people living longer with HIV, more people seeking the care they need, rising healthcare costs in general, and the fact that people newly diagnosed with HIV are more likely to be lower income and in more need of immediate services.

The CARE Act was always intended to work with entitlement programs such as Medicaid and Medicare to fill the gaps left by those programs. Entitlement programs differ from the CARE Act in that if a person qualifies the federal and state government will ensure the funding is available to cover them. In a discretionary program like the CARE Act, a set amount of money is allocated and, regardless of need, that is all that will be spent in that fiscal year. In many states, Medicaids are cutting back on services or cutting people off Medicaid altogether- making the gap that CARE money should fill even larger.

All of these factors combined have led to a situation where the care you get is often determined by where you live. However, there is little consensus that significant changes to the CARE Act will alleviate the problem and some suggested "fixes" could lead to loss of critical services in some areas.

In addition to Project Inform, many HIV/AIDS groups will be involved in Reauthorization this year including the ADAP Working Group, AIDS Action, AIDS Alliance, The AIDS Institute, American Academy of HIV Medicine, CAEAR Coalition, Federal AIDS Policy Partnership -- Ryan White CARE Act Reauthorization Committee, HIV Medicine Association, National Alliance of State and Territorial AIDS Directors, National Association of People with AIDS, National Minority AIDS Council, and others.

Our work is cut out for us this year if we want to protect the healthcare programs people with HIV/AIDS depend on. While it can seem overwhelming, we are not fighting this battle alone. These programs are a part of the promise that government has made to ensure the health of people in the United States. Although our healthcare programs are disconnected and leave many gaps, we can't step away from that promise and lose gains that have been hard won over the past 40 years.

Millions of Americans depend on these programs for essential healthcare and cuts will further increase the expenses of insured Americans as uncompensated care has to be covered. And already those costs put insurance out of reach for 45 million of us.

Great challenges also bring opportunities. We have learned that we can protect these lifesaving programs even in the most challenging environment. However, your help will be needed. The stronger our voice, the better our chance for success.

You can get involved in a variety of ways. If you aren't on Project Inform's TAN email list, send an email to with "subscribe" in the subject field. You'll receive Alerts on all of these issues, along with ways you can make a difference. You can also get involved with other policy organizations and coalitions, like those listed in our comprehensive policy resource guide.

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This article was provided by Project Inform. Visit Project Inform's website to find out more about their activities, publications and services.