Statement on Ryan White Care Act

Feb 22, 1990 Issues: Health

Before the Ryan White CARE Act of 1990, Rep. Waxman attempted to use the Medicaid program to bear part of the financial cost of the AIDS epidemic. The amendment addressed below, which would have changed the Social Security bill to cover many costs related to the AIDS epidemic, was replaced with the CARE act later in the year.

February 22, 1990

The Congressional Record

Rep. Henry A. Waxman
(Extension of Remarks)

Mr. WAXMAN. Mr. Speaker, over the past year, one message has come through loud and clear about AIDS : The epidemic is not over yet. And, as far as health care costs and hospital programs, the worst is yet to come. For some time, we have all looked at numbers like 100,000 cases or 1 million infected Americans or averages of 2 to 3 hospitalizations per patient.

But now we are facing what those numbers really mean. They mean hospitals near bankruptcy. They mean overflowing emergency rooms. They mean rising public health care costs. They mean morbidity and mortality, death and disease among some of our youngest citizens and among many who have no access to health care at all.

AIDS is creating a crisis in access to health care, in financing health care, and in delivering health care. None of these problems is new. All of them are, however, made much worse and much more immediate and unforgiving with the tidal wave of patients that now need and will continue to call upon hospitals and community providers for help.

Medicaid has become a principal source of financing for this help. The Health Care Financing Administration estimates that 40 percent of all AIDS patients at some point become Medicaid beneficiaries. This comes about for a variety of reasons. Most common is that people with AIDS often lose their jobs and thus their insurance and quickly become poor in an effort to pay their health bills. In addition, the number of women and children with AIDS is growing and the disease is increasingly concentrated among many people who are the poorest of the poor, even before they became sick.

Today I am joining with a number of my colleagues in introducing legislation to make Medicaid respond more effectively to this epidemic. I hope to deal with a basic problem of getting early intervention drug services to poor patients while such services are still useful. I hope to assist those hospitals that are struggling with an overwhelming case load of AIDS patients who depend on Medicaid. I hope to begin to use Medicaid dollars to slow the shift of private insurance responsibilities onto public programs. And I hope to provide good home care for children with AIDS .

The first, and most far reaching, of these proposals is to give States the option to expand the eligibility for Medicaid to provide access to early intervention prescription drugs to low-income HIV-infected people.

Medicaid is not available to all poor people in the United States. In order to be eligible, a person must meet two requirements. First, the individual must meet the means test--both in terms of annual income and total personal assets--established by the State.

Second, the individual must also fall into one of three basic categories: he or she must be over 65 or be a member of a family with dependent children or be totally disabled. Even if the individual is poor enough to meet the means test, if he or she does not meet one of these three criteria, then the individual is not eligible for Medicaid.

While some impoverished AIDS patients are undoubtedly eligible for Medicaid as elderly people or as mothers or children, most impoverished people with AIDS who are on Medicaid are eligible because they are disabled. In general, however, the Social Security Administration requires that a patient have full AIDS before he or she is considered disabled; patients with such a full AIDS diagnosis are presumed to be disabled.

Medicaid is not available for payment for early intervention drugs and services for HIV-infected people with no symptoms or with early mild symptoms. Since these people are not disabled yet, they cannot meet the standard for eligibility, no matter how poor they may be. If, however, they develop one of the opportunistic infections or conditions, they will be considered disabled and thus Medicaid eligible.

Thus, a person who is HIV-infected and has a severely compromised immune system (e.g., T-cells under 200) is recommended by National Institutes of Health [NIH] to be taking pneumonia prophylaxis and early AZT to prevent illness. That person is not, however, eligible for Medicaid assistance to purchase these early intervention drugs or to pay for physician visits or laboratory services for diagnosis.

When this person develops pneumonia, however, he or she meets the Centers for Disease Control [CDC] definition for AIDS , is presumed by the Social Security Administration to be disabled, and is eligible for Medicaid assistance to pay for the inpatient hospital care that is needed to treat the AIDS -related pneumonia.

The obvious problem is that while prescription drugs are available to slow or prevent disabling immune deficiency and its accompanying illnesses, most of the people eligible for Medicaid assistance are those who already have such immune deficiency and illnesses. The parallel financial problem is that while early intervention drugs cost less than hospital care, most HIV-infected people become eligible for Medicaid only when early intervention is too late and hospitalization is needed. (E.g., the cost of pneumonia prophylaxis is $1,100 per year; the average cost of hospitalizing an AIDS patient with pneumonia is $17,000 per admission.)

With such limitations, the Medicaid program serves poor HIV and AIDS patients badly, requiring them to get sick almost to the point of no return before assisting them with their health care. Similarly, the program serves hospitals badly by crowding them with AIDS patients whose pneumonia and other illnesses might have been prevented if early intervention had been provided. And, obviously, the program limits serve no financial interests, short-changing less expensive prescription drug care and thus driving up the need for costly inpatient hospital care.

The second proposal that we are making is to improve the Medicaid payment to hospitals that serve a large number of AIDS patients. It has been demonstrated that AIDS patients cost more for hospitals to care for than the Medicaid program in most States will pay. Recently published studies by the National Association of Public Hospitals show that, on average, revenues for AIDS patients are almost 20 percent below the costs of delivering inpatient care for those patients.

If we hope for hospitals to stay in business--not just to provide care for AIDS patients but also to provide acute care to all patients--then we have to make sure that the rising number of AIDS patients and their associated costs does not overwhelm the hospitals. We must, at a minimum, assure that the Medicaid program does not contribute to the problem.

The third proposal that we are making is to allow States to use Medicaid dollars to pay for Medicaid beneficiaries' continuation coverage under COBRA. By making it an allowable Medicaid expenditure for States to pay this premium for people who are otherwise eligible for Medicaid, we allow people to retain their full private health insurance at a savings to both State and Federal governments.

The final proposal is to allow States to use Medicaid dollars to provide home- and community-based care to children with AIDS . Long-term hospitalization for these children is clearly not the most therapeutic or even humane way of caring for them. If we can make it possible for parents, for foster families, or for charitable organizations to care for these sick children outside of such high-tech settings we should do so.

Clearly these proposals are not a panacea for the health care delivery problems that the epidemic is posing. Clearly we could do more for long-term care, for improvement of primary care, for psychosocial services, and for home- and community-based services for adults. But this is a starting point. If we can begin by making these changes to the financing system, it will prolong lives, save dollars, keep financially strapped hospitals afloat, and improve care for people with AIDS and all Americans. If we do not, our whole public health care system may be flooded with sickness, death, and bad debt, and the communities it serves will be devastated.

We must make the start.

I've included a summary of the provisions of the bill:

Optional Medicaid Coverage of HIV-Related Services for Certain HIV-Positive Individuals. States would be allowed to offer Medicaid coverage for certain services for low-income individuals infected with the HIV virus. If a State elects this option, it must cover the following services, to the extent that they relate to treatment of infection with the HIV virus or treatment for (or prevention of) opportunistic diseases relating to AIDS : (1) prescribed drugs; (2) physicians' services, outpatient hospital services, rural health clinic services, and Federally-qualified health center services; (3) laboratory services; (4) clinic services; and (5) case management services. To qualify for this coverage, an individual would have to meet the following criteria: (1) the individual has tested positively to be infected with the HIV virus and has an abnormally low immune function for which medical intervention is indicated to prevent decline in such function or to prevent opportunistic diseases related to AIDS ; and (2) the individual's income and resources could not exceed the maximum amounts allowed, respectively, under the State's Medicaid program for a disabled individual. Unless they were otherwise eligible for Medicaid, these HIV-positive individuals would be eligible only for the services specified, and not for inpatient hospital care. This option would be effective January 1, 1991.

Adjustment in Payments to Hospitals for Individuals with AIDS . States would be required to increase payments for inpatient services delivered to Medicaid-eligible individuals with AIDS by hospitals serving high volumes of persons with AIDS . Hospitals meeting the following criteria would qualify for the payment adjustments: (1) the hospital qualifies as a Medicaid disproportionate share hospital under the State plan; (2) during the most recent calendar year the hospital's inpatient admissions with AIDS exceeded the lesser of 250 or 20 percent of its total admissions; and (3) the hospital has made a reasonable effort to reduce hospitalization of persons with AIDS by making arrangements to coordinate the care of these individuals with at least one of a number of specified outpatient service providers (such as community health centers, TB or STD clinics, or AIDS service demonstration projects). The payment adjustment would apply only to inpatient hospital services provided to Medicaid-eligible individuals with AIDS . The amount of the adjustment would have to equal at least 25 percent of the amount the hospital would otherwise be paid (including its Medicaid disproportionate share adjustment). States would have the option of broadening the eligible class of hospitals or increasing the payment adjustments. This requirement is effective July 1, 1991.

Providing Federal Medicaid Assistance for Payments for Premiums for `COBRA' Continuation Coverage for HIV-Positive Individuals. Under the Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA), as amended by the Omnibus Budget Reconciliation Act of 1989, employers with more than 20 employees are required to offer employees who lose their jobs (and their families) the option of continuing coverage under the employer's group health insurance plan at the employer's group rate. If the employee was disabled at the time he or she lost his job, the employee may continue coverage for up to 29 months. During the first 18 months, the employee must pay 102 percent of the employer's group premium rate; from the 19th through the 29th month, the employee must pay 150 percent of the employer's rate. The bill would allow States to use Federal Medicaid funds, at their regular matching rates, to pay the premiums for ‘COBRA' continuation coverage on behalf of certain individuals. These individuals must (1) have tested positively to be infected with the HIV virus, (2) be entitled to elect COBRA continuation coverage, (3) have an income at or below 100 percent of the Federal poverty level ($5,980 for an individual in 1989), and (4) have countable resources (other than the home) that do not exceed twice the amount allowed under the SSI program ($4,000). The option would be effective January 1, 1991.

Optional State Coverage of Home or Community-Based Services to Certain Children With AIDS. Under current law, States can obtain from the Secretary of HHS a waiver of limitations on the use of Federal Medicaid funds to enable them to purchase home- and community-based services to individuals with AIDS who are at risk of hospital or nursing home care. In order to receive this waiver, States must demonstrate budget neutrality. Under this provision, States would be allowed to offer Medicaid coverage for home and community-based services to low-income children under age 18 who have been diagnosed as having AIDS without obtaining a waiver or demonstrating budget neutrality. Home and community-based services would include case management, supervision or additional services for foster children or their parents, personal care, and respite care. The income and resource standards would be the same as those that would apply under the State's Medicaid plan if the child were in a hospital. This option would be effective January 1, 1991.