As the number of people with acquired immune deficiency syndrome (AIDS) increases, executives of health insurance companies, policymakers in Washington, DC, and the general public are recognizing that there is a crisis in the financing of health care for AIDS patients. The growing sense of crisis stems from the fact that the needs of AIDS patients and the health care financing system are rapidly heading toward a collision. AIDS patients generally are of working age and are expected to live for only a few years, and the costs of their care are catastrophic. The financing system, dominated by private insurance programs and supplemented by publicly supported programs, is not set up to accommodate these patients' needs. AIDS patients are too risky for private insurance programs to cover and are neither old enough nor disabled long enough to receive Medicare. Furthermore, some AIDS patients are not poor enough until they are in the last stages of the disease to be covered by Medicaid, whose payment levels are, in any case, invariably too low to cover the costs of treatment.
The problems in financing the care of AIDS patients go beyond this fragmentation, however. Each component of the system--private insurance, Medicare, and Medicaid--is designed to exclude AIDS patients.
While the nation is faced with the crisis of financing the care of AIDS patients, the public is increasingly becoming dissatisfied with the way the United States pays for medical care in general. Thus, AIDS, in this context, may accelerate the movement toward restructuring the health care financing system.
This article discusses the maze of tensions in the system of financing the care of AIDS patients. How does the system work? How is each player in the system attempting to protect its own financial interest and why? What is the impact of such a system on current and future AIDS patients? What are the remedies suggested in the literature? What are the basic flaws in the system for people who are suffering from catastrophic illnesses?
AIDS is a physical condition that destroys the body's immune system. The virus that causes the destruction of the immune system is called the human immunodeficiency virus (HIV) (Hoffman & Kincaid, 1986-1987). AIDS develops in three distinct stages. In the first, a person infected with the virus develops HIV antibodies but has no symptoms. The person simply becomes "seropositive" or "HIV positive." In the second stage, the person develops symptoms such as weight loss, night sweats, persistent fever, malaise, and shortness of breath commonly known as AIDS-related complex (ARC) (U.S. Public Health Service, 1985).
In the third stage, the person becomes infected with a variety of opportunistic diseases, including enlarged lymph nodes, Kaposi's sarcoma, Pneumocystis carinii pneumonia, and gastrointestinal disorders (Perkins, 1988). Kaposi's sarcoma is prevalent among homosexual AIDS patients, and Pneumocystis carinii pneumonia is prevalent among AIDS patients who are HIV drug users (Adams, 1989). Surveys have estimated that 20 percent to 50 percent of HIV seropositive people may develop AIDS within five to 10 years (Clifford & Iuculado, 1987). In 1981, AIDS patients were expected to live only 10 months; in 1987, life expectancy had increased to 15 months (Scitovsky, 1989). With the wider use of azidothymidine (AZT) and other life-prolonging drugs, the life expectancy of AIDS patients is expected to increase. A recent study found that the median survival rate of AIDS patients treated with AZT was more than double that of the control group (Moore, Hidalgo, Sugland, & Chaisson, 1991).
When a person enters the third stage, the Centers for Disease Control (CDC) officially defines the person as an AIDS patient. Since 1983, the Social Security Administration (SSA) has been using the CDC's definition of AIDS patient and presumes the person to be disabled for the purposes of establishing eligibility for Medicaid. …