Early Treatment for HIV Act (ETHA)

What ETHA accomplishes:
S 833/ HR 1616: ETHA gives states the option of readily amending their Medicaid eligibility requirements to extend coverage to pre-disabled poor and low-income people living with HIV. ETHA is modeled after the successful Breast and Cervical Cancer Prevention and Treatment Act of 2000 (BCCA), which has allowed all 50 states to provide early access to Medicaid to women with cancer. As with the BCCA, ETHA includes an enhanced federal match rate of 65%-83% to encourage states to participate. Fact Sheet

ETHA represents a significant step forward:
ETHA addresses a cruel irony in the current Medicaid system-that under current Medicaid rules, people must become disabled by AIDS before they can receive access to Medicaid-provided care that could have prevented them from becoming so ill in the first place. ETHA brings Medicaid eligibility rules in line with federal government guidelines on the standard of care for treating HIV. ETHA also helps address growing waiting lists for access to life-saving medications and limited access to comprehensive health care in many parts of the country.

The health and economic benefits of ETHA:
The Treatment Access Expansion Project (TAEP) retained PricewaterhouseCoopers (PwC) to assess the effects of early health care access under ETHA. PwC's study found that ETHA slows disease progression, increases life expectancy, and is cost effective. The study's findings include:

• Over ten years, ETHA would reduce by 50% the death rate for persons with HIV on Medicaid.¹

• Over ten years, disease progression would be significantly slowed and health outcomes improved, with 35,000 more individuals having CD4 levels above 500 under ETHA.

• Employing traditional budget analysis rules, the five-year cost of ETHA would be $359 million, and the ten-year cost would be $2,453.6 million. However, traditional budget analysis fails to recognize many of the benefits and savings of ETHA. PwC's analysis found that the "true cost" of ETHA is $55.2 million over five years, and that ETHA would save $31.7 million over ten years!

If a full ten-year time period is considered for each ETHA participant, including those who enter the program in later years, Medicaid offsets alone reduce gross Medicaid costs by 70%, accounting for $1,472.6 million in unrecognized savings.²

ETHA can help prevent HIV transmission:
Access to HIV therapies reduces the amount of HIV virus present in a person's bloodstream (viral load), a key factor in curbing infectiousness and reducing the ability to transmit HIV. Recent studies have found that HIV therapies reduce infectiousness by 60%. These studies confirm that early access to HIV therapies as provided under ETHA is an important HIV prevention tool.

The Early Treatment for HIV Act Is Cost-Effective, Improves Health, Reduces HIV-Related Deaths, and Helps Prevent the Spread of HIV.

¹A Stanford/RAND study, funded by the federal Agency for Healthcare Research and Quality and published in the Journal of Health Economics (2003) confirms these results. The study found that expanding Medicaid coverage for HIV/AIDS patients could reduce HIV-AIDS related deaths by up to 66%.
²The savings associated with providing access to early intervention health care to those who enter Medicaid toward the end of an initial ten-year period are not recognized under traditional budget rules.

The HIV Health Care Access Group is a coalition of 84 national and community-based AIDS service organizations representing HIV medical providers, advocates and people living with HIV/AIDS and providing critical HIV-related health care and support services. For more information, contact co-chairs Laura Hanen, of the National Alliance of State and Territorial AIDS Directors, at 202.434.8091, or Robert Greenwald, of the Treatment Access Expansion Project, at 617.390.2584

Medicare Part D: ADAP Coverage

Medicare Part D:
ADAP Expenditures Must Count Towards TrOOP
What is the Issue? When Congress established the Medicare Part D program, drug spending by other government programs was prohibited from counting toward the calculation of so-called true out-of-pocket costs (TrOOP), with one exception, state pharmaceutical assistance programs. The Centers for Medicare and Medicaid Services (CMS) has interpreted the law such that AIDS Drug Assistance Programs (ADAPs) are not to be considered state pharmaceutical assistance programs even though they are supported by significant state contributions and must ensure that they are the payer of last resort.

How does it affect people living with HIV/AIDS? TrOOP spending is a critical issue because it determines when "catastrophic coverage" begins. Catastrophic coverage begins when individuals with exceptionally high drug costs move through the coverage gap by spending $4,050 in out-of-pocket costs and their cost sharing falls to 5% of drug costs. TrOOP also is significant because these expenses are used to determine when individuals exit the coverage gap known as the donut hole. Because ADAP spending does not count toward TrOOP, individuals can not move out of the coverage gap and are therefore unable to access their Medicare drug formularies for approximately between 9 to 10 months out of the plan year. These individuals must rely only on ADAP, which in almost all cases has a much more limited formulary than the typical Medicare plan.

Reasons to Support Policy Change:

• Cost to Medicare is Minimal: The CHAMP Act passed by the House last session included a provision to allow ADAP and Indian Health Service spending to count towards TrOOP. Those two programs combined were only expected to cost $100 million over five years.

• States Make Significant Contributions to ADAPs: On average, state spending accounts for 21% of the total ADAP budget. Fifteen states contribute more than 25% of their state's overall ADAP budget (Alabama, California, Colorado, Georgia, Idaho, Illinois, Kansas, Montana, Nebraska, North Carolina, Pennsylvania, Tennessee, Texas, Washington and Wyoming) and three states contribute 40% or more of the ADAP budget (Idaho, Nebraska, and Wyoming).

• Provide Cost Savings to Lifesaving Discretionarily Funded Program: Total ADAP spending reached over $1.4 billion in FY2007, with states contributing $294 million to the total. ADAPs provide access to critical medications for approximately 140,000 individuals in communities across the U.S. every year. Unfortunately, ADAPs are limited in their services by the annual appropriations process and meeting demand for HIV drugs is an ongoing challenge. A number of states have been forced to maintain waiting lists over the last several years.

• Catastrophic Coverage Frees Up ADAP to Cover Other Unmet Needs: When ADAP does not count toward TrOOP, it requires ongoing ADAP spending that cannot be used to help other needy people with HIV/AIDS. However, when ADAP does count toward TrOOP, catastrophic coverage frees up ADAP dollars to help other needy individuals. The National Alliance of State and Territorial AIDS Directors has estimated that if ADAP expenditures counted towards TrOOP, it would save ADAP programs $25 to $44 million.

• The Majority of ADAP Clients Live in Poverty: Over 75% of ADAP clients live at or below 200% of the poverty level ($1,733 a month in 2008) and 43% are at or below 100% FPL. For those who just miss qualifying for the Medicare low income subsidy, the cost of drugs can easily total $3,000 per month during the donut hole period. In addition to their HIV regimen, people with HIV/AIDS also need to pay for a host of other medications to treat co-occurring conditions and side effects from their HIV treatment.

• On Average, 17% of ADAP Clients are Medicare Beneficiaries: 69% of these ADAP clients who are Medicare beneficiaries are also eligible for the full or partial LIS. Approximately 30% of these clients are standard beneficiaries who currently experience the coverage gap.

• Request Assistance
• HIV Treatments
• Hepatitis Treatments
• The Access Project
• Patient Assistance Programs
• Federal Poverty Guidelines