The Impact of AIDS on Medicaid – Nursing Research Paper

The Impact of AIDS on Medicaid – Nursing Research Paper
For more than 50 million low-income Americans, the Medicaid public health program is the primary source of health-care coverage and provider of long-term care

(Henry J. Kaiser Family Foundation, 2004, September). For this group of people, private health insurance is not a viable option. Such benefits are often times either unavailable from their employers or are priced immediately out of their income-range. In other instances, these low-income Americans are disqualified by private insurers based upon their disabilities or pre-existing chronic conditions.

This latter fact becomes particularly poignant when considering the future health-care prospects of the estimated 1 million people currently living with AIDS (Centers for Disease Control and Prevention, 2005). Although many individuals begin their treatment with private coverage, the debilitating aspect of AIDS is such that many must eventually give up their jobs and, in turn, lose the source of their costly private insurance. In situations like these, the role of Medicaid becomes paramount to life itself. Without the indispensable doctor care and prescription drugs provided by Medicaid, the recent life-extending advances in AIDS therapy would be lost to an alarming number of patients.

The latest published findings by the Centers for Medicare & Medicaid Services (CMS) reveal that, in 2003, over 231,000 people living with AIDS relied upon Medicaid for health services – and this number was expected to rise (2004, January). To understand what these numbers portend for the future, it necessary to examine the historical context of AIDS and Medicaid, the impact of the AIDS epidemic thus far, and what might be done to ensure quality Medicaid care for generations to come.

Historical Background of Medicaid
The federal Medicaid program was signed into law, along with Medicare, by President Lyndon B. Johnson under Title XIX of the Social Security Act in 1965 (Johns Hopkins AIDS Service, 2004). Medicaid was enacted to address a growing national debate regarding the limitations and failings of the presiding health-care legislation for the elderly and poor, the Kerr-Mills Act of 1960. Under this act, participating states could collect matching federal funds for services tendered to the aged or the impoverished yet it received a lukewarm response from the states for the most part.

The reasons cited by critics were Kerr-Mills’ narrow scope of coverage and its inequitable matching-grant formula that often resulted in poorer states receiving the least amount of federal aid. With less than half the states opting to take part in the national health-care program at its peak, it was clear that Johnson’s “Great Society” was calling for new direction (Michigan State University, School of Social Work, 2004). What it received in Medicaid was a comprehensive replacement for all government health plans and the largest public assistance program in the nation.

Historical Background of AIDS
On June 5th, 1981, the U.S. Centers for Disease Control and Prevention reported an “unusual outbreak of Pneumocystis carini pneumonia among five gay men in Los Angeles.” Around the same time, an aggressive form of Kaposi sarcoma was reported in eight gay men in New York (, 2005). In the coming months, although health officials could not explain the sudden wave of opportunistic infections amongst gay males, the general public was calmed by the overriding theory that these incidents were simply a “gay plague” – nobody else could be infected. This naïve assumption was proven false, however, when cases of PCP began showing up in intravenous drug users in December of 1981 and the first documented case was reported in the United Kingdom (, 2005).

By July of 1982, the number of recognized cases of this frightening illness had swelled to 453, in 23 states (, 2005). By August, the new disease was finally being called by an official name: Acquired Immune Deficiency Syndrome (AIDS). It was also alarmingly apparent that a much larger segment of the population was at risk than had previously been imagined. In December, a child contracted AIDS through a series of blood transfusions, and in early 1983, the first reports of heterosexual transmission began coming to light (, 2005). At the end of the year, the number of official AIDS cases in the U.S. was 3,064, and of these, 1,292 had died. About this time, reports depicting the new, fatal wasting disease were arriving steadily from Europe and Africa as well. The “gay plague” was now on its way to becoming an epidemic of world-wide proportions (, 2005).

Overview of MEDICAID
Medicaid is a jointly-financed, means-tested program of the federal and state governments wherein states administer benefits to eligible participants under a broader scope of federal guidelines. On the federal level, Medicaid is governed by the Centers for Medicare & Medicaid Services, which establishes the minimum requirements that states must adhere to in order to qualify for federal funding. In its current form, the federal government pays for 50 to 77 percent of all Medicaid spending, depending upon state capita income (Kaiser Commission on Medicaid and the Uninsured, 2005). Simply put, states containing the highest number of “qualified poor,” receive the highest rate of matching subsidies from the U.S. government.

Federal Minimum Eligibility Requirements
To meet the criteria for federal matching funds, states must provide services to people receiving “federally assisted income maintenance payments, as well as for related groups not receiving cash payments (Karger & Stoesz, 2005, p.324).” Also known as the “categorically needy,” these related groups include:

• Individuals meeting the requirements for the Aid to Families with Dependent Children (AFDC) program that were in effect in their State on July 16, 1996.
• Children under age 6 whose family income is at or below 133 percent of the Federal Poverty Level (FPL).
• Pregnant women whose family income is below 133 percent of the FPL (services to these women are limited to those related to pregnancy, complications of pregnancy, delivery, and postpartum care).
• Supplemental Security Income (SSI) recipients in most States (some States use more restrictive eligibility requirements that pre-date SSI).
• Recipients of adoption or foster care assistance under Title IV of the Social Security Act.
• Special protected groups (typically individuals who lose their cash assistance due to earnings from work or from increased Social Security benefits, but who may keep Medicaid for a period of time).
• All children born after September 30, 1983 who are under age 19, in families with incomes at or below the FPL.
• Certain Medicare beneficiaries (Centers for Medicare and Medicaid Services, 2004, December).

Federal Minimum Service Requirements
In addition to the socio-economic requirements mentioned above, federal policy also mandates a specific array of services that all states must offer in their Medicaid programs. Typical services include:

• Inpatient hospital services.
• Outpatient hospital services.
• Prenatal care.
• Vaccines for children.
• Physician services.
• Nursing facility services for persons aged 21 or older.
• Family planning services and supplies.
• Rural health clinic services.
• Home health care for persons eligible for skilled-nursing services.
• Laboratory and x-ray services.
• Pediatric and family nurse practitioner services.
• Nurse-midwife services.
• Federally qualified health-center (FQHC) services, and ambulatory services of an FQHC that would be available in other settings.
• Early and periodic screening, diagnostic, and treatment (EPSDT) services for children under age 21 (Centers for Medicare and Medicaid Services, 2004, December).

Federally Sanctioned Optional Services
Finally, there are 34 optional services that states can extend to recipients which also qualify for federal financial support. Some of the more popular benefits include:

• Prescription drugs and prosthetic devices.
• Clinic services.
• Diagnostic services.
• Optometrist services and eyeglasses.
• Nursing facility services for children under age 21 (Centers for Medicare and Medicaid Services, 2004, December).

It is essential to keep in mind that once the mandatory federal requirements have been met, states are then free to operate their programs according to their own discretionary rules and regulations. What this means is that states have the power to decide the duration, scope, and reimbursement rate of the medical services proffered in their specific plans. While the limits themselves must be non-discriminatory and sufficient enough to attain the goal of the medical benefit, the end result is a complex assortment of 56 different Medicaid programs operating throughout the U.S. – one for each state, territory and the District of Columbia (Almanac of Policy Issues, 2000).

Breakdown of Medicaid Spending
The 50 million recipients of Medicaid are generally broken down into four primary groups of people: Children, Adults, Seniors, and Persons with Disabilities. The 2003 statistical breakdown of Medicaid recipients is illustrated in the chart to the right (Kaiser Commission on Medicaid and the Uninsured, 2005).
While it is quickly apparent that children and adults make up the lion’s share of the Medicaid population, it should be pointed out that these two groups account for just 31 percent of program spending. The largest expenditures, 69 percent, go to seniors and people with disabilities – of which the latter group includes people living with AIDS (Kaiser Commission on Medicaid and the Uninsured, 2005). The explanation behind this lopsided proportion of spending is generally attributed to seniors and people with disabilities’ “intensive use of costly acute and long-term care services (Kaiser Commission on Medicaid and the Uninsured, 2005, p. 1).”

Dual Enrollees
Over 7 million members of the Medicaid population are classified as “dual enrollees” or “dual eligibles (Henry J. Kaiser Family Foundation, 2004, May).” In these circumstances, low-income Medicare beneficiaries are also enrolled in Medicaid. They rely on Medicaid to pay lofty Medicare premiums and co-payments as well as other benefits like prescription drugs and long-term care which are not covered at all.

AIDS and Medicaid
The AIDS Epidemic Today
There are approximately 1 million people currently living with AIDS in the U.S., out of an estimated 1.5 million total infections since 1981. Forty thousand new cases are reported each year throughout the country – a number that has remained constant for the last 10 years. Unfortunately, reports indicate that 25 percent of those infected with HIV are unaware of their status despite attempts to promote national AIDS awareness along with early and frequent testing (Henry J. Kaiser Family Foundation, 2004, December). Consequently, new cases are once again expected to rise, especially amongst higher-risk populations.

Groups that share a higher risk for HIV infection are typically ethnic and racial minorities that include African Americans, Latinos, and to much lesser extent, Asian/Pacific Islanders. These same groups have experienced a disproportionate share of the illness since the beginning of the epidemic with African Americans bearing the brunt of the exposure. Today, minorities in the U.S. account for 71 percent of new AIDS cases while making up less than a third of the overall population (Henry J. Kaiser Family Foundation, 2004, December).

Gender and age play prominent roles in the spread of AIDS as well. On the gender scale, diagnoses amongst women have grown from 8 percent in 1985 to 27 percent in 2003, with women of color accounting for almost 70 percent of these new infections (Henry J. Kaiser Family Foundation, 2004, December). Furthermore, latest reports reveal that AIDS is particularly active within the youthful segments of the population, who transmit the virus primarily through sexual relations. Currently, more than 50 percent of all new infections in the U.S. occur in those under the age of 25 (Henry J. Kaiser Family Foundation, 2004, December). Women and minorities, once again, share the highest risk amongst this age bracket.

Treating AIDS
At the present time, it is widely-believed that AIDS is caused by the Human Immunodeficiency Virus (HIV) which is transmitted via sexual activities; needle sharing; blood transfusions; and HIV-positive mothers to their children. Once introduced into a new individual, HIV then proceeds to devastate the body’s immune system, leaving the man, woman, or child extremely vulnerable to opportunistic infections. It is important to keep in mind that people do not die of AIDS, per say. Rather, they eventually succumb to infections or cancers such as pneumonia, Kaposi sarcoma, wasting syndrome, or tuberculosis (HIV InSite, 2004).

In recent years, medical science has made significant strides in HIV/AIDS therapy with the discovery of a new class of anti-HIV drugs known as protease inhibitors. Also called “combination antiretroviral therapy,” or HAART, these drugs have helped to prolong the lives of many HIV-positive individuals by strengthening their immune systems and thereby delaying the onset of AIDS (San Francisco AIDS Foundation, 2005). It should be remembered, however, that HAART is only a treatment, not a cure for AIDS, and it does not work for everyone. Furthermore, the drug regimen is both mentally and physically demanding, has many negative side-effects, and can be prohibitively expensive.

Insurance Analysis of the HIV/AIDS Population
The only national study of people receiving care for HIV/AIDS, conducted by the HIV Cost and Services Study (HCSUS), revealed that almost 44 percent relied upon Medicaid for coverage. Of this study, another 31 percent held private insurance, while 20 percent had no insurance whatsoever (Henry J. Kaiser Family Foundation, 2004, May). Uninsured members of the HIV/AIDS population were most likely relying on publicly-supported care providers like the Ryan White CARE Act clinics, the Veterans Health Administration, and community health centers.

Racially, the HCSUS study observed that Medicaid played a much larger role for minority groups than it did for whites. Statistics revealed that 59 percent of African Americans and 50 percent of Latinos living with HIV/AIDS depended upon Medicaid as opposed to 32 percent of whites. Furthermore, the smallest percentage of uninsured was whites, at 17 percent, compared to 22 percent of African Americans and 20 percent of Latinos (Henry J. Kaiser Family Foundation, 2004, May).

On a gender basis, HCSUS found that 61 percent of women used Medicaid versus 39 percent of men. A probable explanation behind this disparity was reasoned to be that higher numbers of women tend to qualify for Medicaid as a result of pregnancy and dependent children (Henry J. Kaiser Family Foundation, 2004, May).

HIV/AIDS Spending & Services
The Centers for Medicare and Medicaid Services (CMS) estimate that, in 2004, the federal government spent $5.4, or 3 percent, of the $176 billion in total Medicaid spending on HIV/AIDS care (Henry J. Kaiser Family Foundation, 2004, December). These funds were paid out for a wide range of mandatory and optional services that included:

• Inpatient and outpatient hospital services.
• Physician and laboratory services.
• Long term care (nursing facilities and home health care for those entitled to nursing care).
• Prescription drugs
• Dental care.
• Clinic services.
• Case management.
• Hospice Care.
• Home and community-based services (HCBS) programs (Henry J. Kaiser Family Foundation, 2004, December).

Who Qualifies For Coverage?
Most people living with HIV/AIDS become eligible for Medicaid because they meet the disability and income requirements of the federal Supplemental Security Income (SSI) program for persons who are aged, blind or disabled. To qualify for SSI assistance, the current acceptable income level is about 75 percent of the Federal Poverty Level (FPL) (Henry J. Kaiser Family Foundation, 2004, May). While this may not seem unusual, further analysis reveals that there is, in fact, a “Catch-22” situation inherent to the system. Paradoxically, a person living with AIDS cannot gain access to benefits until he or she has physically deteriorated to “disabled” status – despite the existence of therapies that could prevent the disability in the first place.
The consequences of this policy arrangement are such that it establishes an environment where recommended early care for someone diagnosed with AIDS often becomes unviable. In addition, a disincentive to work, or return to work, is created as individuals must weigh the possibility of losing their benefits against earning a paycheck and a life of some normalcy. At this point in time, there are several options being considered to address the inconsistencies in the Medicaid framework but none have been universally adopted as of yet. These include:

• Section 1115 waivers.
• Ticket to Work/Work Incentives Improvement Act of 1999
• The Early Treatment for HIV Act (Henry J. Kaiser Family Foundation, 2004, May).

Thankfully, people living with AIDS, whose incomes are higher than the acceptable SSI threshold, are not completely without recourse. Some can qualify for Medicaid based upon their eligibility for other optional plans offered on a state-to-state basis. One such example is the medically needy program which is now available in 36 states in the U.S. (Henry J. Kaiser Family Foundation, 2004, May). For those that meet the categorical requirements, like disability, the program allows them to “spend down” their incomes on medical expenses to meet the state’s income threshold. Thus, if a person’s income is $300 dollars over the acceptable income level but their medical bills are the same amount or higher, the individual will still qualify for Medicaid.

States also have the option of raising the income eligibility standards of parents, children and pregnant women. In cases like these, the suitable poverty level percentage is raised to 133 percent of the Federal Poverty Line (FPL) all the way to 300 percent, depending upon the participating state. States can also permit flexible methodologies for assessing earnings which can result in people with higher incomes retaining their Medicaid status (Henry J. Kaiser Family Foundation, 2004, May). Such practices are especially significant for HIV-positive pregnant women who would otherwise be unable to afford expensive HAART drugs and could put their unborn children at risk.

In a similar fashion, the Omnibus Budget Reconciliation Act of 1986 gives states the power to make exceptions for elderly and disabled people with incomes up to 100 percent of the FPL. Individuals who fall under this “poverty level expansion” category enjoy full Medicaid benefits as long as they live in one of the 19 states currently making use of this option (Henry J. Kaiser Family Foundation, 2004, May).

Looking Forward
As concern for the HIV/AIDS epidemic has entered the mainstream social consciousness over the past 25 years, there is no social welfare program where this sensitivity is reflected more than on the face of Medicaid. Medicaid today receives 29 percent of the federal governments’ entire expenditure on HIV/AIDS and, consequently, it is no longer the death knell it once represented for the poor in the U.S. (Henry J. Kaiser Family Foundation, 2004, May). However, with more people living with AIDS then ever before and infections amongst low-income groups rising, major revisions to Medicaid are necessary in order to meet the challenges that lie ahead.

1. The Medicaid eligibility requirements must be altered to eliminate the Catch-22 predicament that stalls treatment options for too many people living with AIDS. It is absolutely vital to remember that while legislation is pending and options are being weighed and considered, access to Medicaid is a matter of life and death for potential recipients with AIDS.

Moreover, studies indicate that early treatment with HAART drugs can reduce overall healthcare spending when compared to costly inpatient hospital services for acute care (Kaiser Commission on Medicaid and the Uninsured, 2003). So why must people be forced to wait until their sickness disables them before they can be saved? In a country that stresses prevention and prophylactic methods as part of its national AIDS awareness campaign, it makes very little sense (Centers for Disease Control and Prevention, 2005).

2. Another problem that must be addressed is the issue surrounding Medicaid patients with HIV/AIDS who are entering or returning to the workforce. To provide Medicaid coverage and then yank it away at the penultimate point – when they return to work – is both insidious and “un-American,” to apply a capitalist perspective to the situation. From a capitalist point of view, more people in the workforce allegedly create a “trickle-down economy,” where all classes benefit from the profits being added to the Gross National Product. So why would the system provide disincentives to work?

If AIDS recipients lose their Medicaid benefits as soon as they begin to earn a little money, they are then faced with what is in essence a “Sophie’s Choice” between good health and the glimmer of financial independence. Couple this dilemma with the fact that the Federal Poverty Level is a totally unrealistic measure of the cost of living, and the current income ranges allowable by Medicaid take on farcical proportions.

What is more, these arguments exist aside from the prevailing moral issue that revolves around true quality of life. The system should not exist to prop people up and then remove their support when the prospect of a normal, healthy life draws near. Living with AIDS should never be the primary focus for anyone. The ability to pursue a rich and natural life should be the goal.

3. The variation in state Medicaid programs across the country also creates a technical morass for people living with HIV/AIDS. Because there is no universal standard for Medicaid care in the U.S., the range of benefits recipients receive can widely fluctuate from state to state. What this means is that many people with HIV/AIDS cannot afford to move around the country for fear of losing benefits that are not offered in another state. A tangential effect of this problem is that potential career opportunities in other areas of the country cannot be explored either. Finally, if the person living with AIDS happens to live in a less-generous Medicaid state, often times the individual must rely on other alternative programs or just forgo necessary services altogether.

4. For the long term, the issue that poses the single, greatest threat to Medicaid and its AIDS recipients is the ever-looming possibility of federal budget cuts. In his 2006 Budget Proposal, President Bush recommended only flat funding for a variety of AIDS programs as well as $18 million in cuts to the Housing Opportunities for Persons with AIDS Program and the CDC’s Division of HIV/AIDS Prevention (The Body, 2005). On top of these cutbacks, the budget also called for an incredible $45 billion reduction in overall Medicaid spending over the next 10 years.

While such drastic cuts may seem unfathomable given the enormity of the problems Medicaid programs face, it is important to remember the prevailing social hegemony that has been in place since the Reagan administration. Twenty-six years ago, President Ronald Reagan initiated a new slate of economic policies specifically aimed at “Starving the Beast,” which in turn, effectively crippled the social welfare state to pre-New Deal levels. Little has changed today.

Like his predecessor, President Bush has also increased the defense budget, allotted huge tax cuts for the wealthy, and run up an unprecedented national debt. The end result is a strained fiscal climate where social service agencies like Medicaid are typically the first to feel dramatic pinches in funding. While the Senate did elect to restore the proposed cuts on March 17th, 2005, the House of Representatives voted the opposite way, leaving the matter unresolved and the future financial plans for Medicaid in balance.

This is a very haphazard way for the wealthiest country in the world to care for some of the sickest members of its population. Indeed, this “nickel and dime” approach could later prove to be a financial juggernaut as former Medicaid AIDS patients, victimized by budget cuts, require expensive inpatient and acute medical care at the end of their lives.
As Ernest Hopkins, the director of federal affairs at the San Francisco AIDS Foundation, laments, “How can the president call for an improved response to the epidemic but then cut or under fund the programs that are absolutely critical to achieving this goal… Rhetoric without action is disingenuous (2005).”

Almanac of Policy Issues. (2000, September). Medicaid: A Program Overview. Retrieved July 11, 2005, from hhs_medicaid.shtml, (2005, July). The History of AIDS, 1981-1986. Retrieved July 11, 2005, from
Body, The: The Complete HIV/AIDS Resource. (2005, February 8). Bush FY 2006 Budget Proposal. Retrieved July 11, 2005, from kaiser/ 2005/feb8_05/budget_hiv.html
Centers for Disease Control and Prevention. (2005, June 21). A Glance at the HIV/AIDS Epidemic. Retrieved July 10, 2005, from
Centers for Disease Control and Prevention, (2005, June 21). Prevention. Retrieved July 10, 2005, from
Centers for Medicare and Medicaid Services. (2004, December 3). Medicaid: A Brief Summary. Retrieved July 10, 2005, from
Centers for Medicare and Medicaid Services. (2004, January). Medicaid and Acquired Immunodeficiency Syndrome (AIDS) and Human Immunodeficiency Virus (HIV) Infection. Retrieved July 10, 2005, from
Henry J. Kaiser Family Foundation. (2004, December). The HIV/AIDS Epidemic in the United States. Menlo Park, CA.
Henry J. Kaiser Family Foundation. (2004, May). Financing HIV/AIDS Care: A Quilt With Many Holes. Washington, D.C.
Henry J. Kaiser Family Foundation. (2004, September). Medicaid and HIV/AIDS. Menlo Park, CA.
HIVInSite. (2004, September). What are HIV and AIDS? Retrieved July 11, 2005, from
Johns Hopkins AIDS Service. (2004). Medicaid Overview: Basic Program. Retrieved July 11, 2005, from
Kaiser Commission on Medicaid and the Uninsured. (2005, January). The Medicaid Program at a Glance. Washington, D.C.
Kaiser Commission on Medicaid and the Uninsured. (2003, August). Medicaid’s Role for People with Disabilities. Washington, D.C.
Karger, H. J., & Stoesz, D. (2005). American Social Welfare Policy: A Pluralist Approach (4th ed.). Boston: Pearson Education, Inc.
Michigan State University, School of Social Work. (2004). Medicaid Primer. East Lansing, Michigan. Retrieved July 10, 2005, from ~sw/student_res/medicaid/medicaid_primer_intro.pdf
San Francisco Aids Foundation. (2005, February 15). Treatment Information. San Francisco, CA. Retrieved July 11, 2005, from