In the news ... 2006 archive

Ensuring Adequate HIV/AIDS Treatment
and Prevention in California’s FY 2006-07 Budget

Prepared by the California Alliance of HIV/AIDS Advocates: San Francisco AIDS Foundation, Project Inform, AIDS Project Los Angeles, the LA Gay & Lesbian Center, AIDS Healthcare Foundation and AIDS Services Foundation of Orange County

Introduction
Under the leadership of Governor Schwarzenegger and the State Legislature, California has maintained a strong commitment to prevention, treatment and care programs to respond to the ongoing challenges posed by the HIV/AIDS epidemic. California has distinguished itself for its willingness to augment federal funding for HIV/AIDS programs where necessary to ensure an effective and compassionate public health response to this disease.

As a result of large state budget deficits in recent years, advocates have confined our requests for increases in HIV/AIDS spending to the full funding of the AIDS Drug Assistance Program, which is at the cornerstone of the state’s efforts to treat and prevent HIV/AIDS. The Governor and Legislature understand the life-saving nature of this program and have stepped in to fund it in the absence of an adequate federal commitment to the program. We are enormously grateful for that leadership.

With the advent of highly effective anti-retroviral medications, Californians are living with HIV and AIDS longer than ever before. Some 8,000 to 9,000 Californians continue to become infected with HIV annually. For the 2006-07 fiscal year, it is vital that California increase spending in several areas that are crucial to ensuring our continued success in the treatment and prevention of HIV/AIDS. We look forward to working with policy makers to address the following set of budget requests in 2006-07.

• Permit ADAP to pay premiums of Part D eligible individuals—$758,888
• Fund treatment and prevention programs to address the connection between methamphetamine use and HIV/AIDS among gay men and other men who have sex with men—$7.5 million
• Expand the CARE-HIPP program to ensure optimal healthcare coverage for people with HIV/AIDS—$271,100 in savings to ADAP
• Extend the $5.6 million increase in HIV prevention funding approved in FY 2005-06
• Increase Office of AIDS staffing to support the expansion of CARE-HIPP, pay Part D premiums and increase its benefits counseling capacity—$300,000
• Assure full-funding for ADAP

1. Permit ADAP funds to be used for the payment of premiums for Medicare Part D eligible individuals also eligible for ADAP.
Under the new Medicare Prescription Drug Program, known as Part D, qualifying individuals are generally eligible for prescription drug coverage after paying a monthly premium. They must also pay an annual deductible and co-payments for their medications. Some Part D beneficiaries, particularly those eligible for both Medicare and Medi-Cal, qualify for assistance from Medicare and other sources to pay these costs.

The Governor and Legislature agreed to permit ADAP to pay some of the cost burdens imposed on Part D eligible individuals with HIV/AIDS in the FY 2005-06 budget. However, approximately 2,720 ADAP clients who have only Medicare and ADAP coverage are still required to pay monthly premiums that average $23.25. Most people in this population are severely low-income; 80% of ADAP clients earn less than $18,000 per year. For many, it will be impossible to afford these monthly premiums, which could force them to stop taking HIV medications altogether.

ADAP is intended to provide full coverage, at no cost to the client, for prescription drug coverage for HIV disease and its associated conditions. For several years running, the Governor and Legislature have declined to impose additional cost burdens on this population in recognition of the severe risks associated with treatment interruption both to the individual and to the public health.

The participation of a Medicare only ADAP client in Part D saves ADAP approximately $1,500 per year, and ADAP’s coverage of co-payments for these individuals currently produces rebate revenue for the program. Therefore, the $758,888 we are requesting to permit ADAP to pay premiums for this population will help ADAP to achieve cost savings.

2. Fund treatment and prevention programs to address the connection between methamphetamine use and HIV/AIDS among gay men and other men who have sex with men.
The use of methamphetamine among gay and other men who have sex with men in California and meth’s impact on the transmission of HIV are at crisis levels. Gay men are 10 to 20 percent more likely than other groups to use meth, and, depending on where they live in California, 10 to 20 percent of gay men report that they have used meth in the last 6 months. Studies suggest that gay men who use meth are up to four times more likely to be infected with HIV than those who do not, and in San Francisco, one half of the city’s estimated 1,000 new cases of HIV infection annually are attributed to this drug. Meth use is also contributing to a lack of good self-care for many HIV infected individuals and the spread of certain sexually transmitted diseases (STD’s)—particularly syphilis.

Some local jurisdictions are spending limited funds to address this problem, but additional funding is needed to support areas hard-hit by meth use to create or expand treatment and prevention efforts to address this epidemic. We are requesting a $7.5 million appropriation for the Office of AIDS to address the widespread use of methamphetamine among gay men and other men who have sex with men. Of that amount, $3.75 million should be dedicated to social marketing and other programs to change community norms regarding meth use in this population. We recommend that the Office of AIDS use these funds to create a unified campaign in local jurisdictions highly impacted by meth use. The remaining $3.75 million should be used by the Office of AIDS to issue a Request for Proposals for evidence-based treatment interventions in local jurisdictions highly impacted by meth use.

3. Expand the CARE-Health Insurance Premium Program to ensure optimum healthcare coverage for people with HIV/AIDS and as a means of saving ADAP funds.
The CARE-HIPP program of the Office of AIDS currently uses $1.7 million in federal Ryan White CARE Act funds to pay health insurance premiums for 560 people disabled by HIV at risk of losing their private health insurance coverage. CARE-HIPP results in continuity of insurance coverage for people with HIV/AIDS and HIV medications being paid for by private insurance carriers rather than ADAP. Research conducted by UCLA concludes that CARE-HIPP premium payments are effective at keeping people linked to their primary care coverage and are extremely cost-effective, saving the state one-half of what it would cost ADAP to pay for medications.

Current eligibility rules require that individuals be disabled by HIV in order to access CARE-HIPP. Dropping the disability requirement would increase CARE-HIPP participation by 46 percent to 829 clients. If fully implemented, this expansion would require that $782,000 be transferred from ADAP to CARE-HIPP, achieving a net savings to ADAP of $391,000. We believe it is reasonable to achieve one-half of this expansion in FY 2006-07, resulting in a transfer of $391,000 from ADAP to CARE-HIPP in FY 2006-07 and achieving a net savings to the state of $195,500. This action would also ensure that 414 people remain linked to their primary care coverage to ensure optimum health outcomes and reduce dependence on state funded programs.

CARE-HIPP currently pays for COBRA coverage for eligible individuals for a total of 29 months. However, California law permits individuals to purchase 36 months of COBRA coverage. Current data show that approximately 80 clients would benefit from extending their CARE-HIPP coverage from 29 to 36 months. Given the annual cost of $3,240 for CARE-HIPP funded COBRA coverage, extending COBRA payments for these 80 individuals would require the transfer of an additional $151,200 from ADAP to CARE-HIPP, producing an additional net savings of $75,600 to the state.

We propose that a total of $542,000 be transferred from ADAP to CARE-HIPP for FY 2006-07, achieving a total net savings to ADAP of $271,100 for the budget year and keeping hundreds more people with HIV/AIDS linked to private healthcare coverage.

We believe there may be additional opportunities to expand CARE-HIPP coverage in the future in order to save the state additional dollars. We will continue our research to assess these opportunities.

4. Extend the $5.6 million increase in funding for HIV prevention programs approved in FY 2005-06.
The Governor and Legislature approved a one year increase of $5.6 million in the FY 2005-06 budget for HIV education and prevention programs. These funds were passed through the Office of AIDS to 51 counties that had suffered reductions in their prevention funding over a period of years.

It is critical that the state continue to maximize the prevention of new cases of HIV infection. The activities funded by this $5.6 million are vital to that effort. We therefore request that these funds be placed into the base budget of the Office of AIDS beginning in FY 2006-07.

5. Increase Office of AIDS staffing to support the expansion of CARE-HIPP, pay Part D premiums and increase its benefits counseling capacity.
Staffing levels in the Office of AIDS have not met the program’s needs for the past several years, while the responsibilities of the office have grown. In order to administer the expansion of CARE-HIPP and pay Part D premiums, it will be necessary for the Office of AIDS to increase its staffing by two personnel, for which we estimate a total cost of $200,000.

Additionally, the number of qualified benefits counselors for people with HIV/AIDS has been dramatically reduced in the past several years, due largely to static federal funding and cuts to the Ryan White CARE Act in spite of growing need. To address the deficit in such an important area, the Office of AIDS hired a state HIV/AIDS benefits coordinator. However, the enormous burden of preparing the HIV/AIDS integrated care system, people living with HIV/AIDS and their providers for Medicare Part D has completely exceeded the capacity of this individual. In addition, expected cuts and changes to Medicaid overall and to Medi-Cal in particular will create more need for system coordination and individual assistance. Increasing the benefits coordinating staff by one employee would provide greater assurances that agencies statewide are appropriately trained to assist low-income people with HIV/AIDS to secure continuity of care in ways that result in savings to ADAP and other state funded programs. We therefore request $100,000 to fund one additional HIV/AIDS Benefits Coordinator in the Office of AIDS.

6. Assure full-funding for ADAP.
Advocates are enormously grateful for the Governor’s decision to fully fund the AIDS Drug Assistance Program in his January 10, 2006 budget proposal. The program, which will serve some 31,600 people in FY 2006-07, is targeted to receive an additional $38 million. Of that amount, $16.5 million will come from the General Fund, $11.5 million from additional rebate revenues and $10 million from ADAP savings as a result of the implementation of Medicare Part D. The total cost of California’s ADAP program in 2006-07 will be $296.4 million, of which $107.6 million will come from the General Fund.

Despite this $38 million increase, actions at the federal level may require a greater commitment from the state. In approving the federal budget for FY 2006, Congress subjected all discretionary, non-defense programs to a 1 percent across-the-board cut. This means that Title II ADAP funding for California could be reduced by an estimated $1 million to $1.5 million. Additional state funding may be needed to make up for any shortfall created by this potential reduction in ADAP revenues.