The Impact of Medicaid Expansion on HIV-Positive Men and Women in the Southern United States

By Sarah E. Rudasill
2016, Vol. 8 No. 02 | pg. 3/3 |

Discussion of Results

The benefits of the Medicaid expansion can be classified into five categories, three of which are quantifiable: gain in quality-adjusted life years, increased economic productivity, savings for the AIDS Drug Assistance Program, reduced transmission of HIV, and a positive psychosocial impact. The most substantial economic benefit is the increase in life years of each individual who enrolls in ART. Studies have shown that regular adherence to a daily, oral ART regimen extends life by approximately 23.26 years. However, it is critical to assign a quality value to those life years, as some are spent in relatively healthy states while others feature a poorer quality of life. According to recent studies, the additional longevity generated by ART corresponds to 12.94 quality-adjusted life years (Mascolini, 2013).

The next challenge is to assign a value to each year of quality life gained. The international standard that most private and government-run health insurance plans worldwide use is $50,000 per QALY (Kingsbury, 2008). Canada, Britain, and the Netherlands firmly set the marginal benefit of another quality year of life at this rate and decline interventions that exceed this cost. The United States, however, does not set a defined value on life, instead funding interventions that are “medically necessary and appropriate” (Kingsbury, 2008). A group of Stanford economists have argued that the economic value assigned to life is far too low. Using the willingness-to-pay model based upon payments for kidney dialysis, they determined that the actual value of life is $129,000 per quality-adjusted life year (Kingsbury, 2008). Therefore, there is tremendous disagreement about the true value of a life, and thus both estimations were utilized in calculating two separate benefit estimates: $22,019,644,538.21 by the government’s calculations, or $54,505,723,628.15 according to the Stanford methodology.

The next benefit calculation attempts to quantify the gain in economic productivity from enrolling HIV-positive individuals on ART. HIV and AIDS have a substantial negative impact on productivity because as many as 90% of those infected are of working age (Resch et al., 2011). Untreated HIV is characterized by frequent opportunistic infections, leading to repeated sick leave and eventual departure from the labor force. Regular treatment with ART, however, has been demonstrated to restore productivity to the levels of productivity prior to infection (Resch et al., 2011).

Patients were working over 30% more in both hours and days than they were prior to beginning treatment, and overall employment rates for HIV-positive individuals jumped from 27% to 42% within just three years of starting regular treatment (Thirumurthy et al., 2012). The economic value of this additional productivity is difficult to measure but has been estimated at approximately $1,719 per quality life year gained (Resch et al., 2011). Therefore, a Medicaid expansion under the Affordable Care Act would yield an estimated productivity increase of $918,895,000.00 for the economy.

The final critical and quantifiable benefit to a Medicaid expansion is savings for the AIDS Drug Assistance Program. Under the Ryan White Care Act, both federal and state governments make contributions to the program, which funds prescription drugs for HIV-positive individuals making under 300% of the federal poverty level. Although there are no current waiting lists for ADAP in any state, cost savings for the program would ensure that there are no future waiting lists for the program, like the waiting list of over 9,000 individuals who could not get care in 2011 (Lefert et al., 2013). The savings for the program, which total an estimated $539,940,092.19, could also be funneled into preventative programs, utilized for HIV testing, or harnessed as an additional tool for funding the Medicaid expansion at the federal or state levels.

There are two other major benefits to a Medicaid expansion that cannot be quantified and included in the cost-benefit analysis but are worthy of discussion. The first is the reduction in HIV transmission that is observed when HIV-positive individuals enroll in ART, undergo regular medical treatment, and maintain an undetectable viral load. Early initiation of ART reduced the risk of HIV transmission by 96% among HIV-positive individuals with heterosexual partners (Prevention). However, the effects on transmission for men who have sex with men remains unclear at this point. Despite the fact that 61% of new HIV infections result from MSM transmission, this tremendous reduction in observed transmission rates for heterosexual couples has the greatest potential of reducing HIV transmission among women. Of the 25% of women who are diagnosed with HIV annually, over 86% of those infected contract the virus through heterosexual contact (Reif et al., 2014).

Therefore, a Medicaid expansion that vastly increases the number of HIV-positive individuals on ART holds promise in reducing transmission to women. Furthermore, treatment with ART also reduced mother-to-child transmission of the virus by 90% (Prevention). The total number of prevented HIV transmissions cannot be predicted, but the potential savings in life and productivity are enormous. Each case of non-transmission that would have otherwise occurred yields a savings of $411,000 for a lifetime of treatment, as well as an undetermined number of QALYs valued somewhere between $50,000 and $129,000 per QALY, and increased economic productivity of $1,719 per year. Considering that the average age of HIV diagnosis is 30 years of age, cases of non-transmission of HIV would save on average 50 life years, generating tremendous value for society.

The final important consideration of a Medicaid expansion is the psychosocial impact of regular treatment and a greater longevity and quality of life. Patients who no longer had financial certainty for medical coverage can now seek a diagnosis and treatment knowing that they will be able to afford the medications required. This may encourage many of the undiagnosed and unenrolled patients characterized in the CDC’s Care Continuum to pursue diagnosis and treatment, generating value for society. Unlike when the virus first emerged in the 1980’s, HIV-positive patients can expect longer, healthier lives and maintain life partners who are HIV-negative.

Not only can patients expect more time with their loved ones, but they can also expect higher quality lives with knowledge that their diagnosis is a treatable condition rather than a death sentence. They can develop a sense of purpose through the ability to make contributions within the home or workplace. The knowledge that one can live a productive life even after a diagnosis with HIV with affordable medical coverage through Medicaid will encourage others to get tested and improve their prognosis with sustained treatment.

There are two major costs to consider in the cost-benefit analysis. The greatest cost posed by a Medicaid expansion is the cost of treatment, which includes prescription drugs for ART, physician and hospital services, and expected end-of-life care. Over a single lifetime, an HIV-positive individual can expect to spend $411,000 on undiscounted medical care (Mascolini, 2013). Another study supported this approximation, finding that average discounted lifetime costs were approximately $354,000 (Schackman et al., 2006). The treatment costs currently constitute less than half of the total predicted costs for expanding Medicaid because ART has been the standard of care since the late 1990s and has become increasingly affordable (Hogg et al., 2008).

However, there is always the possibility that new research will arise over the two decades of treatment provided to those who receive expanded Medicaid. This could yield the development of a more effective yet more costly treatment for HIV, increasing the expenses of a Medicaid expansion. If the medical field accepts a newer, more expensive treatment as the standard-of-care, then governments will pay the additional costs of this medication, yielding some uncertainty in cost approximations.

Additionally, the socioeconomic position of the HIV-positive population eligible for a Medicaid expansion dictates consideration of the additional social program usage for an average increase of 23.26 years of life. The average benefit for three major social programs – the Supplemental Nutrition Assistance Program, Section 8 Housing, and Social Security Disability Insurance – was used to predict the total cost of supporting each HIV-positive individual receiving Medicaid and enrolling in treatment for the entire length of their additional expected life years. This is a vast overestimation of the costs of a Medicaid expansion because not all low-income, HIV-positive individuals are receiving social support for their entire lives. However, the lack of data on program usage rates and a desire to conduct a fair cost-benefit analysis leads to the overabundance of caution in calculating the maximum possible costs. Since all of these programs are already in place, the analysis presumes that the additional administrative expenditures in processing the claims of this population are negligible.

Despite tremendously overestimating the costs and remaining unable to quantify two key benefits of the expansion, the analysis clearly demonstrates that the benefits of an expansion outweigh the costs of the expansion. Relying upon the more conservative government definition of the value of life, the benefits of $ 22,019,644,538.21 are greater than the costs of $20,685,197,542.34 by over $1 billion. Using the Stanford definition of the value of life, the benefits of $ 54,505,723,628.15 outweigh the costs even further, resulting in a net benefit of over $33 billion. Considering that the benefits are underestimated and the costs are overestimated, the true net benefit lies comfortably in the positive region.

The implications of a net benefit of a Medicaid expansion for the HIV-positive population include the adoption of legislation that will enable this valuable policy to be implemented. Society values policies that result in net benefits, and since the Medicaid expansion for HIV-positive individuals will increase total welfare, it should be adopted. The ten southern states targeted in this research are especially poised to benefit from adopting the recommended Medicaid expansion because the new demographic of at-risk HIV-positive individuals is positioned to qualify under the new guidelines. A Medicaid expansion would thus assist the most vulnerable while reducing the South’s status as the HIV epicenter.

It is unlikely that all of the minimum 41,312 individuals will enroll even if eligible under the new Medicaid expansion. Some will never learn of their newfound eligibility while others will continue to avoid treatment because of stigma, discrimination, concerns about confidentiality in the medical field, poor geographic access to health care, and arduous treatment routines (Chesney et al., 2000). While final enrollment changes the absolute numbers for the monetary benefits and costs of an expansion, it does not change the final conclusion because all costs are proportional to the number of individuals enrolled. Therefore, the benefits of the expansion will always outweigh the costs, regardless of the number of individuals who ultimately enroll.

A further positive externality of expanding Medicaid is the potential psychosocial benefits of transforming HIV from a death sentence to a chronic but manageable condition. One out of every seven HIV-positive individuals is unaware of his status, with reasons varying from not wanting to know out of fear that nothing can be done to the sentiment that one is not susceptible to the virus (Chesney et al., 2000). Those who do not wish to know their status out of fear may change their minds when they learn that they can receive tremendous financial assistance in affording medications that will substantially extend their lives. The promise of quality life years with family and friends may be enough to spur testing and treatment among those at risk of the virus.

Furthermore, remembering that the Medicaid expansion would apply to all low-income groups and not just the HIV-positive population shows that more individuals will have access to financial assistance for preventative and diagnostic services. With more individuals receiving preventative health care and access to primary care physicians, transmission rates may be further lowered, and the number who are unaware of their status may also fall. While impossible to quantify, these additional positive externalities may help slow the rate of growth of HIV infections in the South, in addition to improving the quality and longevity of life for those already living with the disease. Ultimately, these factors may coalesce to yield a change in the South’s status as the epicenter of the HIV epidemic.

Moving forward, the ten southern states can develop effective strategies for implementing and recruiting eligible HIV-positive individuals by examining the experiences of other states in implementing a Medicaid expansion. For example, Massachusetts first implemented its expansion in 2006 and thus serves as a recent model for the opportunities and challenges that may arise. The major problem encountered by Massachusetts was the tremendous increase in the observed demand for health care. Hospitals experienced a 12% increase in volume, which stressed existing limited resources (Massachusetts, 2012, pg. 5).

With a constant supply of primary care physicians throughout the expansion, the state struggled to provide the preventative and diagnostic services to the newly insured population now demanding access. However, the state learned from its early mistakes and implemented new initiatives to recruit and retain primary care physicians through expanded medical school enrollment and debt repayment options (Massachusetts, 2012, pg. 5). Each of the ten southern states, which are already facing a deficit of physicians in rural regions, must be especially attuned in ensuring that adequate health care infrastructure is in place to deal with the influx of new patients.

An additional challenge facing Massachusetts was reaching out to the newly eligible population to enroll them in Medicaid. It solved this problem and achieved the lowest uninsured rate in the country by adopting automatic enrollment of patients who received uncompensated care in clinical settings (Massachusetts, 2012, pg. 6). If each southern state adopted this mechanism of enrolling patients, then the number of HIV-positive patients who could enjoy the benefits of an expansion would be maximized. While automatic enrollment leads to increased demand for medical care and thus rising costs, Massachusetts exacerbated the problem through the widespread use of fee-for-service models. This compensation scheme incentivizes both a focus on treatment rather than prevention as well as the provision of excess treatment to patients, which contributed to the rising costs observed in the state (Massachusetts, 2012, 6). As a result, the ten southern states should adopt a Medicaid expansion in the context of a broader health care reform that focuses on outcomes rather than just services provided to a patient.

Overall, it is clear that the southern United States should adopt a Medicaid expansion for HIV-positive individuals. The benefits of increased longevity and quality of life, increased labor productivity, reduced dependence on drug assistance programs, reduced transmission, increased willingness for testing and treatment, and improved psychosocial mentalities far outweigh the costs of direct medical treatment and indirect social support throughout the gained life-years.

The magnitude of individuals expected to be impacted by such a policy change is enormous, with the state potentially assisting 20% of the current HIV-positive population. Providing access to coverage for diagnosis and treatment will enable improved lives for patients while also reducing transmission for the rest of society. Furthermore, each state’s decision to expand Medicaid would generally help individuals who are marginalized within society, helping to secure for them the resources necessary to lead healthier lives. Ultimately, each southern state should carefully consider the opportunities presented by a Medicaid expansion and move forward in adopting an economical and socially-beneficial policy.


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