Medicare and Part D

Latest version of CA budget may show deeper deficit, increasing concerns for people with HIV

May 9, 2008

California HIV Alliance:
Ensuring Adequate Funding for HIV/AIDS Care and
Prevention in California’s 2008-09 Budget
The California HIV Alliance is a coalition of California’s largest HIV/AIDS providers and advocates, including San Francisco AIDS Foundation, Bienestar, Project Inform, AIDS Healthcare Foundation, AIDS Project Los Angeles, AIDS Services Foundation of Orange County, LA Gay & Lesbian Center and Sacramento CARES.

Introduction
Since the early days of the epidemic, California has served as a model to the nation and world for its response to the HIV/AIDS epidemic — sound prevention policies, universally accessible treatment and compassionate care for people living with the disease. Our state has distinguished itself by its willingness to commit substantial state funding to ensure an effective and compassionate public health response to this disease. Under the leadership of Governor Schwarzenegger and the state Legislature, California has maintained this commitment to the ongoing challenges posed by HIV and AIDS, and has refused to sacrifice any of the vital, life-saving programs that the state has embraced.

This year, however, the Governor’s proposed budget includes sweeping cuts to public health care programs that would be especially devastating for low-income Californians living with HIV/AIDS. Some of these cuts directly impact programs at the state Office of AIDS, while others impact broader-based healthcare programs. These cuts will likely result in future increases to the state’s healthcare costs, as people living with HIV/AIDS find the care they depend on harder to come by and inadequate to their needs.

The California HIV Alliance opposes all reductions to these public healthcare programs. The state cannot solve its fiscal problems by cutting or eliminating essential services that keep California’s most vulnerable populations healthy. We cannot sanction the diminution of quality and affordable services that will jeopardize the health and lives of thousands of Californians.

We are fully aware of the state’s dire budget situation and the apparent need for budget reductions. However, we urge the Legislature to keep three principles in mind:

• Short-term savings, especially in medical care and treatment, generally lead to greater long-term costs; immediate budget cuts to health care programs generate more acute, expensive medical conditions;
• Decreased access to care and treatment will not be the only loss low-income patients will experience; most will suffer from cumulative and dramatic reduction of services brought about by funding cuts to multiple social service and health care programs.
• Given the estimated $16 billion deficit, the state budget can not be balanced through budget cuts alone. Revenue enhancements must be considered.

In order to maintain an adequate and effective response to a growing AIDS epidemic, we believe the following programs must be maintained at current levels:

• Fully fund the AIDS Drug Assistance Program: Current proposals to reduce the AIDS Drug Assistance Program (ADAP) costs by eliminating drugs from the formulary could result in the loss of essential drugs used to treat AIDS-related illnesses. Although the medications targeted for elimination are non-antiretrovirals, they play a crucial role in maintaining the health of people with HIV/AIDS.
• Restore funding to the Therapeutic Monitoring Program: This program provides resistance and viral load testing for ADAP clients to ensure that the drugs that people with HIV and AIDS receive are working effectively. Currently, the program is at maximum capacity, even with a 100 percent increase in funding in 2007.
• Protect the Medicare Premium Payment Program: This program pays Medicare Part B (doctors’ insurance) monthly premiums for Medi-Cal beneficiaries. The proposed elimination of these payments could result in the loss of primary medical care coverage for Medi-Cal beneficiaries with HIV/AIDS. This is the same population that already faces significantly increased drug costs due to a complex set of Medicare regulations.

Budget Requests

1. Fully fund the AIDS Drug Assistance Program: $7 million
ADAP currently provides life-saving medications to over 30,500 HIV-positive individuals who otherwise cannot afford them. Unfortunately the Governor’s 2008-09 budget proposes to cut $7 million from ADAP, reducing General Fund dollars from $107.7 million to $100.6 million.

Although the proposed cuts to ADAP would not remove antiretroviral treatments, they would reduce the availability of important drugs that manage side effects and co-morbid conditions, including wasting medications, hematological agents, anti-convulsants, and anti-psychotics, among other drugs. This proposal would have a serious and detrimental impact on the state’s ADAP population; effective treatment of side effects and other co-morbid conditions is frequently as important as antiretrovirals in the effort to hold disease progression at bay and allow the patient to avoid more serious illness and death.

A coordinated and comprehensive drug and medical services regimen is essential for people with HIV and AIDS to maintain optimum health. Funds spent today on effective drugs ultimately save the state significant health care costs at a later date. Reducing access to life-prolonging medications not only endangers the health of individuals living with HIV/AIDS, but also runs the risk of increased burdens on emergency rooms and other “safety net” providers who are not equipped to deal effectively with HIV and AIDS.

• The California HIV Alliance is opposed to this 2008-09 budget proposal to remove certain life-prolonging medications from the AIDS Drug Assistance Program formulary.

 

2. Restore funding to the Therapeutic Monitoring Program: $4.3 million
California’s Therapeutic Monitoring Program (TMP) provides vouchers for counties that enable low-income, HIV-positive individuals to obtain viral load and resistance tests. The program allows ADAP to be medically effective and cost-effective by ensuring that the HIV medications provide the maximum benefit.

Standards of care for HIV-infected people recommend quarterly tests to measure CD4 (T-cell) count and viral load, two important measures of immune system functions. Individuals who have failed a regimen of HIV medications also are urged to receive a drug resistance test to determine which of the available antiretroviral medications for HIV might help to reduce their infection. Additionally, it recently became a recommended standard of care to test anyone starting HIV treatment for resistant strains of HIV in order to determine the optimum therapeutic strategy.

Although TMP was funded at $8 million in 2001-02, it was reduced to $1 million the following year when $7 million was transferred to ADAP. From 2003 to 2006, TMP was funded at $4 million, well below what was needed to ensure full viral load and resistance testing for all counties. For the current year, TMP was put back on track for adequate funding with a redirection of ADAP funds that brought the programs budget up to $8 million.

Unfortunately, the Governor does not propose to maintain that one-time money. Moreover, the program is slated to receive an additional cut, bringing the program’s funding down to $3.7 million. This cut would make it hard for counties to continue providing CD4 and viral load testing to all ADAP clients.

• The Alliance is therefore requesting an increase of $4.3 million annually in funding for the Therapeutic Monitoring Program to restore the program to 2007-08 levels.

 

3. Protect the Medicare Part B Premium Payment Program: $4.2 million in 2007-08 and $50.1 million in 2008-09
A high proportion of people living with HIV/AIDS depend on Medi-Cal’s medically needy program, which provides full scope Medi-Cal services to people with income above Medi-Cal eligibility levels. These individuals must meet Medi-Cal asset limitations and a monthly share of cost in order to qualify for Medi-Cal assistance. The lowest share of cost in California is above $400 per month. The Medi-Cal program also pays their monthly Medicare Part B premium — around $100 per month — which saves the state money by shifting the cost of their primary medical care from Medi-Cal (which requires state matching funds) to Medicare which is federally funded.

Under the proposed cuts, these individuals would now have to pay the Medicare Part B premiums out of their own pocket. But most earn as little as $1,300 a month and because of a complex set of Medicare regulations, these same people are already facing increased prescription drug costs, some significantly higher since the advent of Medicare Part D (prescription drug plans). These individuals already must choose between healthcare coverage and other necessities of life, such as food and rent. If these individuals lose their Medicare insurance, they will be unable to access their primary health care, potentially leading to a serious interruption in both health care and treatment. This is particularly threatening for dual eligibles with HIV/AIDS as they must be significantly disabled and at an advanced stage of disease progression to qualify for Medicare. If they are able to return to Medicare Part B, they would be penalized with higher premiums. In the meantime, they will likely seek outpatient care through publicly funded clinics and emergency rooms.

• For these reasons, the California HIV Alliance urges you to protect the Medicare Part B Premium Payment Program and ensure current funding levels for the program.

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The California HIV Alliance partners with the Alliance for Patient Care to oppose other cuts proposed for the Medi-Cal program. Particularly troubling for people living with HIV/AIDS are the proposed elimination of optional benefits, the 10 percent reduction to provider reimbursement rates, and the quarterly recertification process.

We therefore ask that the Legislature do the following:

4. Protect Optional benefits, particularly adult dental, psychotherapy and podiatry
Although these services are considered “optional” by Medicaid, they are not optional to people living with HIV/AIDS, who depend on them to maintain their health and well-being. Adult dental, psychotherapy and podiatry services in particular are critical to people living with HIV/AIDS.

Access to dental care is critical for people with HIV/AIDS. The state’s Denti-Cal provides essential services such as cleanings, examinations, periodontics, and restorative care to low-income people with HIV who are eligible for Medi-Cal. Many HIV-related infections start in the mouth and weakened immune systems leave people with HIV disease more susceptible to the spread of oral infection. HIV medications also contribute to extreme dry mouth, which can lead to further deterioration of oral health.

Medi-Cal’s psychotherapy benefits also play a crucial role in the well-being of Californians with HIV/AIDS. Studies have shown psychotherapy to be as important as prescription medications in alleviating and coping with depression. People with HIV/AIDS often suffer from depression and those with untreated depression are less likely to adhere to the complex treatment regimens necessary to maintain health while living with HIV.

The access provided to podiatrists by Medi-Cal is also an important component of HIV care and treatment. As a result of lifesaving drugs, many people with HIV are living longer; unfortunately they are also beginning to suffer from a variety of concurrent health conditions, some of which may be side effects of prescription drugs, HIV disease progression, or simply aging. Diabetes is more common among those living with HIV/AIDS and podiatry is an essential service for maintaining health.

• We appreciate the fact that the Legislature chose not to cut optional benefits in the 07-08 mid-year budget cuts. We urge the Legislature to reach the same decision for the 08-09 budget.

 

5. Protect Medi-Cal Provider Reimbursement Rates
Governor Schwarzenegger’s budget proposal for 2008-09 includes a 10 percent cut in Medi-Cal provider reimbursement rates. Medi-Cal’s provider rates are already among the lowest in the country, and HIV specialists struggle to serve their clients under current rates. An additional 10 percent cut could force some physicians to stop seeing Medi-Cal clients, or stop taking new patients. Either outcome would further reduce low-income Californians’ access to HIV and other specialists, particularly in rural or otherwise underserved areas.

It is also important to note that, while HIV specialists have access to federal Ryan White Program funds, those funds can not be used to supplement Medi-Cal reimbursement rates because of the Ryan White programs’ status as a payer of last resort.

In addition, the ten percent cut to pharmacy providers — including the active ingredient cost for medications — could significantly impact Californians with HIV/AIDS, as well as those with other high cost medical conditions. People with HIV/AIDS depend on brand name pharmaceuticals for effective HIV care. These cuts could leave pharmacists unable to deliver brand name drugs at cost, much less make any profit to continue their business.

• We were disappointed that the Legislature acted mid-year to begin provider rate cuts for July 1, 2008; we urge the Legislature to reconsider that action as you work to adopt the 08-09 budget.