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ADAP and State to County Cost Shifting

With LIHP enrollment beginning in earnest, counties are facing a little-discussed side effect of joint county-federal financing for the program. Whereas counties presently use local funding to pay for care of their uninsured low-income residents, they will now receive a 1-to-1 federal match. In most cases, this federal support should increase the total funding available to counties for indigent health.

For a small proportion of patients who are currently covered by joint state and federally-funded programs, LIHP enrollment could significantly shift costs from the state to the counties. ADAP is a prime example. In 2009, California’s ADAP program covered medication costs for 38,033 uninsured or underinsured beneficiaries, nearly a third of HIV-positive people in the state.

42% of ADAP beneficiaries have incomes under 100% FPL and 30% make between 100 and 200% of FPL. With the high cost of HIV and AIDS medications, the program spends an average of $1,480 per member per month.

Right now, the state pays for 29% of ADAP spending (more than $126 million in FY 2010), with the rest covered by federal Ryan White Part B and ADAP emergency funding (25%), and by manufacturer drug rebates (47%).

If ADAP’s low-income beneficiaries enroll in LIHP, a sizeable proportion of the state’s current costs could shift to counties. Los Angeles (15,047 ADAP beneficiaries in FY 2009-10), San Francisco (4,717), and San Diego (4,317) are likely to see the biggest shifts.

As California expands coverage under reform, policymakers will need to reconsider the interactions of funding and administration of ADAP and other state and county coverage programs. For now, their future remains unclear.

Uncited ADAP statistics are from KFF’s statehealthfacts.org.