THE AIDS INSTITUTE

The AIDS Institute

HEALTH REFORM AND ADAP

Emily McCloskey, Public Policy AssociateCarl Schmid, Deputy Executive DirectorAIDS Drug Assistance Program Summit

Washington DCJuly 6, 2010

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• Should greatly positively impact people with HIV/AIDS, including ADAP

• Most changes not implemented until 2014

• Overview• Components of health reform that will impact

ADAP

• What we need to do between now and 2014

• Post 2014 environment

Health Reform & ADAP

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Health Reform• Health Coverage will be mandated

• Provide an estimated 32 million additional people with health care coverage

• Medicaid Expansion• Exchanges

• Private health insurance reform

• Medicare Part D reforms

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Medicaid Expansion

• Medicaid Expansion for People with Incomes less than 133% federal poverty rate (beginning in 2014)

• Removes the disability requirement

• +16 million people• Including many Ryan White ADAP clients

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Medicaid Expansion

• Federal Share 100% in 2014-16, phase down to 90% in 2020

• State Option to Expand Medicaid Now• But no increased Federal Match

• CT only state that has done this

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Medicaid Expansion

• Standard Benefit for those who are newly eligible

• Not for Current Beneficiaries

• States key to Implementation• Drugs Included, but will there be limits, costs?

• State variation will continue

• Ryan White can wrap around and fill in the gaps

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Closes the Medicare Part D “Donut Hole”

• 2010-Everyone who reaches the Donut Hole will receive a $250 rebate

• 2011-receive a 50% discount for brand name drugs while in the donut hole

• Each year, the “donut hole” will be incrementally closed for both brand and generic drugs

• By 2020-“Donut hole” closed, but beneficiary still responsible for 25% co-pay

Post-Reform Medicare Part D Coverage: The Donut Hole in 2020 (brand-name)

$0- $310

Consumer Pays

Deductible“Donut Hole”

CoverageGap

Total Spending

≈ 95%

80% Feds Pay Reinsurance

15% Plan Pays

Catastrophic Coverage

Federal Government Pays

75% Plan Pays

25% out-of-pocket5% out-of-pocket

Private plan Pays

$630 $3,610Consumer

Out-Of-Pocket

$310

Total consumer out of pocket = $4,550

$2,830 -$6,440$310-$2,830

Total consumer out of pocket = $2,143

$1,203

- $7,643

50% ManufacturerDiscount as TrOOP

25% out-of-pocket

25% Plan Pays

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ADAP Expenditures Count towards TrOOP

• Beginning in 2011, ADAP expenditures can count towards True Out of Pocket Expenses (TrOOP)

• High Priority Issue for Community

• Will help Medicare Part D Beneficiaries who are on ADAP

• Will help state ADAP budgets go further

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Medicare Part D Impact on ADAP

• Allowing ADAP to count as TrOOP and closing the Donut hole will positively impact ADAP

• Only for those ADAP clients who are also eligible for Medicare

• 16% of ADAP clients or 17,000 clients (NASTAD)

• Ryan White can fill in the gaps• State decision

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State High Risk Pools• Provides coverage to those with a pre-existing condition & no coverage for last 6 months

• Must have had a problem getting insurance due to a pre-existing condition

• Coverage begins August 2010, runs through 2013

• State can set up, or HHS will

• Enrollees receive both health care and treatment

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State High Risk Pools• Premiums will vary state to state

• For a 50 year old enrollee, premiums could range from $3840 to $6840 annually.

• $5 billion• Not a sufficient amount – Medicare economists estimate the program could run out by 2011.

• Coverage Estimates: 200,000-400,000 people

• Less than 10 percent of people with pre-existing conditions

• Unknown how many people with HIV/AIDS will be included

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Insurance Reform• Beneficiaries can not be removed from a plan

• Checks on Rate Increases

• Prohibition on life-time limits

• No discrimination based on pre-existing conditions (beginning in 2014 for adults)

• Cap on out-of-pocket expenses (beginning in 2014)

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Insurance Reform & ADAP

• Private Insurance Reforms should avail more people with HIV/AIDS to access private insurance

• Will relieve some burden on Ryan White and ADAP

• Ryan White can wrap around and fill in gaps

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Exchanges

• Private Exchanges Created at the State Level (beginning in 2014)

• +24 million people

• 4 Tiers of Coverage

• Subsidies for up to 400% of FPL

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Exchanges• Impact on ADAP

• Non-medicaid eligible people with HIV/AIDS with income under 400% FPL, without Private Insurance, must be in Exchanges

• Some with private insurance will switch to exchanges

• Exchanges will offer Drug Coverage, but do not know limits and co-pays• Ryan White can wrap around, pay co-pays

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Between Now & 2014• Most Coverage Expansion Begins in 2014

• Until then, Ryan White will remain the safety net for people with HIV/AIDS

• A few clients moved to High Risk Pools

• Work on Benefit Design• Medicaid-federal/state level• Exchanges-federal/state level

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2014 & Beyond• Beginning in 2014 should see a shift of Ryan White patients to Medicaid & Exchanges

• Ryan White should help clients enroll

• Ryan White can pay for costs and cover drugs that are not covered by Medicaid & Exchanges

• Ryan White can provide care & treatment to those not covered by Health Reform (e.g. The undocumented)

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2013 Reauthorization of Ryan White• Will have to defend future of the Program

in light of Health Reform before it is fully implemented

• Community is having Discussions to discuss long term

• Short term will be working on • Health Reform Implementation • Ensuring Adequate funding for ADAP and the entire Ryan White Program

THE AIDS INSTITUTE

The AIDS Institute

THANK YOUEmily McCloskey -

emccloskey@theaidsinstitute.org 202-835-8373

Carl Schmid - cschmid@theaidsinstitute.org 202-462-3042