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HIV-Medicaid Plan Scrapped; Drugs Deemed Too Expensive

By Amy Goldstein
The Washington Post

The Clinton administration has abandoned an attempt to use Medicaid to ensure that tens of thousands of poor, HIV-infected Americans who still are relatively healthy could afford new therapies that may prolong their lives, according to federal health officials.

The decision comes eight months after Vice President Gore announced to a roomful of AIDS activists that he had directed the U.S. Department of Health and Human Services to explore ways to "ease suffering, renew hope and ensure that good people are not priced out of live-saving medicine."

The department had hoped to cover the drugs by expanding Medicaid, the federal health insurance program for the poor and disabled. But by law, Medicaid can only start innovative experiments if it can prove that they will not add to the program's expenditures.

Department sources said Thursday that, although officials had hoped that by paying for more people to get therapies, they could reduce the cost of their medical care in the long run, they had concluded that the drugs were simply too expensive.

"No matter how we sliced it, we could not come up with a way," said one senior department official. "We might have to take responsibility for being too optimistic at the beginning."

For AIDS activists and public health officials, the prospect had been heralded as an end to what they have complained for years is a short-sighted approach to medicine: Medicaid will cover AIDS patients once they become sick enough to qualify as disabled, but - in many cases - it will not cover people in order to keep them healthier.

The issue focuses attention on a fundamental problem as the AIDS epidemic in the United States has reached a new phase. Research has made important strides lately, developing new classes of drugs and new drug combinations that have proven effective at slowing the virus's ravaging effects. At the same time, those benefits are not reaching all Americans alike, particularly as the epidemic has tilted heavily toward minorities and the poor.

Between 1995 and last year, the percentage of people who developed full-blown AIDS decreased by 13 percent, according to the U.S. Centers for Disease Control and Prevention. But the drop was just 5 percent among Hispanics, and there was no improvement among African Americans.

To try to make drugs more accessible, the administration persuaded Congress this year to increase its funding of the AIDS Drugs Assistance Program (ADAP) by 70 percent to $285 million. But during the last two years - as word of the new, more effective drugs spread - many states ran out of their ADAP funds. Even now, AIDS activists say they are uncertain whether that infusion will cover the escalating demand for the new combinations of drugs, which cost an average of $12,000 a year for each patient.

Thursday, federal health officials emphasized that they would continue to search for other ways to use the Medicaid program to provide AIDS drugs to healthier people, such as encouraging individual states to apply for experiments or asking Congress to appropriate more money.

But one senior department official acknowledged, "We don't have a plan B at the moment."

Another official said that, before abandoning the nationwide expansion, the Health Care Financing Administration, which oversees Medicaid, had studied four scenarios under which Medicaid would provide the benefits to HIV-infected people at 100 percent, 200 percent, 250 percent or 300 percent of the poverty level.

They concluded that, in the first year, that expansion would help 44,000 to 114,000 HIV-infected Americans. "Unfortunately, none of (the scenarios) are revenue neutral - or close," the source said.

According to one AIDS activist, health officials said it would cost about $800 million a year to cover people at 100 percent of poverty.

"In the scheme of things, this isn't a whole lot of money," said Joseph Kelly, deputy director of the National Alliance of State and Territorial AIDS Directors. "What we need is the political will to do it."

But Daniel Zingale, executive director of the AIDS Action Council, said, "I still believe we can work with the administration to address the problem."