HD35 - Study of Premium Assistance Programs for HIV-Positive Individuals
Study Origin: House Joint Resolution No. 663 of the 1993 General Assembly directed the Secretary of Health and Human Resources, in consultation with the Department of Medical Assistance Services and the State Corporation Commission's Bureau of Insurance, to study the cost-effectiveness of an insurance premium assistance program for Human Immunodeficiency Virus (HIV) positive persons and to develop a plan for review by the General Assembly. The study findings and recommendations are to be submitted to the Governor, the Joint Subcommittee Studying HIV and the 1994 General Assembly.
Background: Ensuring adequate health coverage is a major concern for those receiving a positive diagnosis for HIV infection. Medical expenses range from $3,400 to $11,880 annually for persons with HIV and are about $33,000 for persons with Acquired Immunodeficiency Syndrome (AIDS). As with other serious, chronic illnesses, once the condition is diagnosed, insurers may reject a new applicant or pre-existing condition limitations may apply to the coverage.
An additional problem may occur for those persons previously working and covered by employer group insurance. Federal and state law provide for continuation of policies for a period of time, with some qualification, if an employee leaves a job. The employee is responsible for picking up premiums. Although insurance is therefore available, the cost frequently becomes prohibitive and the individual must drop coverage. Options then are to be uninsured or to try to qualify for Medicaid.
Findings: At present, 27 states have addressed this problem through premium assistance programs. These programs supplement or pay, for qualifying individuals, the premium for continuing the employer-group insurance. Requirements are that the individual be documented as HIV positive and unable to work due to the medical condition, be low-income, and be eligible for such coverage.
Five states that prepared evaluations of their premium assistance programs found that the programs were cost-effective in terms of postponing or avoiding the necessity of Medicaid coverage. A 1993 federal report concluded that "potential savings to these five states, even using conservative estimates...are considerable." Additionally, it is believed that the program provides better continuity of care by allowing individuals to maintain coverage without lapses and to continue with the same providers.
States have used state funds and federal funds for AIDS programs (Title II of the Ryan White Comprehensive AIDS Resources Emergency Act of 1990) for these programs. About 15 states currently use the federal funds for this purpose. Virginia received $1.4 million in Ryan White Title II funds FY 1993; at present funds are being used to support community HIV consortia which provide support and medical services and to provide HIV related medications. The Department of Health believes it has not had adequate funds to support a premium assistance program but is considering such use in the future if federal funding is increased.
Although there is insufficient data at this time to estimate the number of HIV positive Virginians who could benefit from this type of program, the program size in other states has been fairly small. Few states have enrolled more than 100 participants, and most are smaller. Even so, the programs appear to be cost-effective.
Recommendations: The premium assistance program represents one mechanism to cost-effectively provide health insurance coverage for those who are HIV infected and unable to work because of the illness. Based upon the findings of the study, the following recommendations are made:
Recommendation 1: A premium assistance program for HIV positive individuals should be implemented in Virginia. Based upon an estimated average participation level of 50 persons, annual costs are projected to be $170,000.
The program should have, at minimum, the following characteristics:
• Provide for payment of health policy premiums for individuals eligible to continue their employer's group policy under COBRA 85 provisions
• Income limit: no more than 200 percent of the federal poverty level
• Cash asset limit: no more than $10,000
• Documentation of HIV infection and inability to work for medical reasons
• Exclusion of co-payment and deductible payments
• Coverage of family members if the HIV infected individual's policy is the sole source of health insurance
• Participants not eligible for Medicaid - the Health Insurance Premium Program (HIPP) already provides premium payment for Medicaid recipients when determined cost-effective
Recommendation 2: The program should be evaluated after one year of operation. The evaluation should include information regarding the cost, utilization and cost avoidance achieved through the program.