Costs and Financing of Medicare Enrollees Living with HIV/AIDS in California

Medicare Brief No. 8 ~ August 2001

Summary: Because Medicare does not cover a large part of the health care that its enrollees living with HIV/AIDS require, they need other coverage to supplement it. Medicaid is a major source of that supplemental coverage. In California, Medicare enrollees with HIV/AIDS who were also enrolled in Medi-Cal (California’s Medicaid program) had total payments from both programs of $177 million, or an aver-age of $28,956 per person in the fee-for-service-system in 1998. Of that total, Medicare paid for 38 percent, mainly for inpatient hospital and ambulatory care, while Medi-Cal paid 62 percent, mainly for prescription drugs. For these dual enrollees, many of Medicare’s benefit gaps – including a large share of prescription drugs, nursing facility services, and home care – are being filled by Medi-Cal.

This analysis indicates that the incremental cost to the federal government of filling gaps in the Medicare benefits package would be considerably less than the full cost of the additional benefits. Through Medicaid and other programs, the federal government is already paying a substantial part of public program expenditures for dual enrollees with HIV/AIDS. Other issues to consider are how the dual Medicare-Medicaid funding streams affect the programs’ cost efficiency, and from the perspective of Medicare enrollees and providers, how well the dual programs coordinate to meet the needs of people with HIV/AIDS and other chronic conditions.