October 14, 2004 Contact:       Alfred Chiplin, Esq.

202) 293-5760

NOTE: This is the first of a three-part Alert series that the Center for Medicare Advocacy, Inc. is publishing regarding the implications of the Medicare Modernization Act of 2003 for AIDS Drug Assistance Programs (ADAPs).  This first Alert reviews ADAP programs' current functions.  The second CMA Alert will examine the relationship between Part D and ADAPs.  The third CMA Alert will explore the various mechanisms states use to purchase HIV/AIDS drugs.

The Medicare Modernization Act (MMA) of 2003 will shift prescription drug coverage for many HIV and AIDS patients to Medicare from a variety of other health financing programs.  This shift raises several questions about where the 11,000 HIV/AIDS patients who currently get prescription drug coverage through AIDS Drug Assistance Programs (ADAPs) will get their drugs, and who will pay for them.  ADAPs are a crucial source of coverage for many low-income HIV/AIDS patients who typically face over $10,000 in drug costs each year.  Although ADAPs struggle to provide a maximum amount of coverage, the transfer of 11,000 clients to the Medicare program will not necessarily alleviate their financial burdens.

ADAPs are the third largest source of federal funding for HIV care, after Medicaid and Medicare, according to the Kaiser Family Foundation.  ADAP funds come mostly from earmarked allocations under Title II of the Ryan White Comprehensive AIDS Resources Emergency (CARE) Act.  In FY 2003 72% of the $961.5 million national ADAP budget was from earmarked funds.  States provided the second largest source of funding (18%), although this varied widely from state to state, with some states providing no funding at all.  The remainder of the national ADAP budget was provided through CARE Act Title I and Title II Base funds, ADAP Supplemental funds, and other federal funds.  This funding structure makes ADAPs particularly vulnerable to changes in federal and state budgets.  Contrary to Medicare, ADAPs are not entitlement programs; they must meet their clients’ needs with the money provided to them, versus having a budget that reflects the number of clients enrolled in the program. (Kaiser Family Foundation, HIV/AIDS Policy Fact Sheet, May 2004.  Click here to view the factsheet.)

Because funding is so variable, many states have implemented cost-control measures that may involve stricter eligibility requirements, more limited drug formularies, and higher cost-sharing.  Each state determines ADAP eligibility based on income as a percent of the Federal Poverty Level (FPL), with limits ranging from 125% of FPL to over 500% of FPL.  States also limit formularies, ranging from 18 drugs in Colorado to 474 in New York.  Only four states have open formularies.  Eleven states had waiting lists as of June 2004.  For an in-depth study of ADAPs, including a complete state-by-state summary of eligibility requirements, see the National ADAP Monitoring Project’s Annual Report at

ADAPs were incorporated into the Ryan White CARE Act in 1990 and are administered by states.  They are an important source of prescription drug coverage for HIV/AIDS patients with little or no drug coverage and serve as a payer of last resort.  In its 2002 Ryan White CARE Act Annual Data Summary, the Health Resources and Services Administration (HRSA) reported that 136,000 HIV/AIDS patients, or 15% of the total HIV/AIDS population, received prescription drug coverage through ADAPs.  Of these, the National ADAP Monitoring Project estimates that, in 2003, 8% were also covered by Medicare, while 7% had Medicaid and 13% had private insurance.  The report did not specify whether the Medicare and Medicaid populations were dually-eligible individuals, but did report that over 80% of ADAP clients had incomes at or below 200% of the Federal Poverty Level (FPL).

The Centers for Disease Control and Prevention estimates that approximately 887,000 people have been diagnosed with AIDS in the United States as of 2002.  Many of these people qualify for Medicare because they have received Social Security Disability Insurance benefits for at least 24 months.  Even with help from federal programs, HIV/AIDS patients have had to piece together their prescription drug coverage through a number of avenues, including private insurance, Medicaid, and AIDS Drug Assistance Programs (ADAPs).

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