[Ip-health] ADAP Financial Eligibility Criteria and ADAP Expenditures

Krista Cox krista.cox at keionline.org
Mon Aug 22 15:13:56 PDT 2011

KEI has a new blog discussing ADAP financial eligibility criteria and ADAP
expenditures which is available here: http://keionline.org/node/1202

ADAP Financial Eligibility Criteria and ADAP Expenditures

AIDS Drug Assistance Programs (ADAP) serve low-income, underinsured or
uninsured HIV-positive patients in the United States and its territories.
General eligibility requirements may include residency, clinical eligibility
based on specific CD4 counts, and income. Specific eligibility criteria for
each ADAP is determined by each individual state. The following data, which
focuses on financial eligibility criteria and ADAP expenditures, has been
compiled from the National Alliance of State and Territorial AIDS Directors
(NASTAD's) National ADAP Monitoring Project 2011 Annual Report [1] and
NASTAD's ADAP watchlists [2].

Financial Eligibility Criteria

ADAP financial eligibility in the U.S. ranges from a low of 200 percent of
the Federal Poverty Level (FPL) with respect to a patient's gross income to
a higher cutoff point of 500 percent.

The 2011 FPL [3] was set at $10,890 (or $13,600 in Alaska and $12,540 in
Hawaii) for a household of one person. For each additional person in the
household, $3,820 is added to the base FPL of $10,890. Thus, for a household
of one person, the ADAP financial eligibility ranges from a maximum gross
income of $21,780 to a maximum gross income of $54,450 depending on the
state of residency.

The largest group of ADAP clients currently served according to income level
are those residing below the standard (100 percent of) the FPL, representing
45 percent of all ADAP clients in the U.S. and its territories in FY 2010.

With regard to the specific income limits for ADAP eligibility in the 50
United States and the District of Columbia (as of August 12, 2011):

* 8 states have financial eligibility of <250 percent: Arkansas, Idaho,
Iowa, Nebraska, Oklahoma, Oregon, Texas, Vermont (VT eligibility is based
off net income)
* 2 states have financial eligibility between 250 and 299 percent: Alabama,
* 24 states have financial eligibility between 300 and 399 percent: Alaska,
Arizona, Florida, Georgia, Illinois, Indiana, Kansas, Kentucky, Louisiana,
Minnesota, Missouri, Montana, New Hampshire, North Carolina, North Dakota
(based off net income), Ohio, Pennsylvania, South Carolina, South Dakota,
Tennessee, Washington, West Virginia, Wisconsin, Wyoming
* 10 states have financial eligibility between 400 and 499 percent:
California, Colorado, Connecticut (based of net income), Hawaii, Michigan,
Nevada, New Mexico, New York, Rhode Island, Virginia
* 6 states (including the District of Columbia) have financial eligibility
of 500 percent: Delaware, District of Columbia, Maine, Maryland,
Massachusetts, New Jersey
* Mississippi did not report its ADAP data for FY 2010 and its eligibility
criteria is unknown.

In addition to income limits, 14 states also have asset limits which range
from $4,000 in Nevada to $25,000 in New York and DC. Other states imposing
asset limits include: Delaware, Georgia, Iowa, Kentucky, Louisiana,
Minnesota, New Mexico, Oregon, Tennessee, Utah and Washington. While some
states exclude a "major residence," one vehicle, or federally recognized
retirement accounts, others do not provide for such exclusions and ownership
of such items may preclude an individual from ADAP support.

In the last two years, numerous states have been forced to turn to
cost-containment strategies including lowering financial eligibility.
Arkansas, for example, reduced its financial eligibility from 500 to 200
percent FPL, resulting in the disenrollment of 99 clients in September of
2009. Illinois has twice lowered financial eligibility, ultimately going
from 500 to 300 percent FPL. North Dakota reduced eligibility from 400 to
300 percent. Ohio reduced eligibility from 500 to 300 percent FPL,
disenrolling 257 clients in July 2010. South Carolina went from a high of
550 FPL to 300 percent FPL. Utah reduced its financial eligibility from 400
to 250 perent FPL, disenrolling 89 clients in September 2009. In addition to
the six states that have already significantly reduced financial
eligibility--in the case of Arkansas, a greater than 50 percent
reduction--due to increasing demands on ADAPs, other states, including
Florida and Wyoming, are also considering lowering financial eligibility
before March 31, 2012 (which is the end of the ADAP FY 2011).

As discussed previously [4], ADAPs are becoming increasingly impacted and
states have resorted to placing HIV-positive patients on long and growing
wait lists or have implemented other cost containment strategies. State
ADAPs have been forced to enact these cost-containment strategies even after
$25 million in ADAP emergency funding was allocated to address funding
crises in 2010.

ADAP Expenditures and High Prescription Drug Costs

Prescription drug costs represent, by far, the greatest expenditure for
ADAPs. In FY 2009, prescription drug expenditures for ADAPs totaled more
than $1.43 billion, approximately 85 percent of total ADAP expenditures for
the year. Prescription dispensing costs reached 1 percent of expenditures
while insurance premiums, co-payments and deductibles combined represent an
additional 10 percent of total ADAP expenditures in FY 2009. The remaining 4
percent of ADAP yearly expenditures in FY 2009 went to program
administration, quality management, monitoring, client outreach and
enrollment, or other costs including (but not limited to) contract services
to dispense medications, determination of eligibility, pharmacy charges,
shipping fees, and lab services.

[Chart available at http://keionline.org/node/1202]

The average monthly cost per ADAP client for drug expenditures varies from
state to state, from a low of $30 per patient in New Mexico to a high of
$2,286 per patient in Kansas. 19 states reported a greater than $1,000
average cost per client per month in June 2010. The total June 2010 drug
expenditures for ADAPs was $146,457,975, serving 135,596 clients across the
United States and its territories, or an average of $1080 monthly drug
expenditure cost per patient.

The number of low-income, underinsured and uninsured HIV-positive patients
in the United States coupled with high prescription drug prices has resulted
in an unsustainable program for treating HIV-positive clients. The fact that
85 percent of all ADAP expenditures in FY 2009 went directly to the costs of
prescription drugs and the fact 20 ADAPs cited escalating drug costs as one
reason for implementing cost-containment strategies suggests that measures
are needed to reduce the high costs of HIV/AIDS medicines. The reforms
proposed by Senator Sanders (I-VT) in S.1138, the Prize Fund for HIV/AIDS
Act [5], would help address the funding shortages by lowering the overall
costs of treatment for HIV/AIDS while simultaneously increasing innovation
for these life-saving medicines. S.1138 would result in greater competition
which is expected to lower the cost of drugs [6] by more than $7 billion per
year domestically, with the savings shared by both health insurers and

Krista Cox
Staff Attorney
Knowledge Ecology International
(202) 332-2670

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