Overview of Medicaid Managed Care Provisions in the Balanced Budget Act of 1997

Prepared by Andy SchneiderThe Center on Budget and Policy Priorities

for The Kaiser Commission on the Future of Medicaid

December 1997

This paper was prepared for The Kaiser Commission on the Future of Medicaid with support from The Henry J. Kaiser Family Foundation. The views represented in this report are those of the author and do not necessarily represent the views of The Kaiser Commission on the Future of Medicaid.

Contents

Overview

1. Summary
2. Medicaid Managed Care: An Overview
3. Statutory Pathways to Mandatory Medicaid Managed Care
4. Standards for State Contracting with Medicaid MCOs
5. Payment Rates for Medicaid MCOs
6. Organizational Qualifications for Medicaid MCOs
7. Access and Quality Standards for Medicaid MCOs
8. Beneficiary Protections
9. Accountability of Medicaid MCOs for Compliance with State and Federal Standards
10. Primary Care Case Management Option and Rural Beneficiaries
11. Implications for Safety Net Providers

Conclusion

Appendices:

A. Standards for State Contracts with Medicaid MCOs

B. Index to Statutory Provisions Relating to Medicaid Managed Care

Overview of Medicaid Managed Care Provisions in the Balanced Budget Act of 1997

The Balanced Budget Act of 1997 (P.L. 105-33) dramatically expands the authority of state Medicaid agencies to provide covered health care services through managed care organizations (MCOs). The Act enables states, without obtaining waivers from the Secretary of Health and Human Services, to require most Medicaid beneficiaries to enroll in MCOs that do business only with the Medicaid program. It also allows states, again without obtaining waivers, to limit the number of participating Medicaid MCOs. These provisions are likely to have a major effect on access to covered hospital and physician services by low-income women and children and other Medicaid beneficiary populations.¹ The implications of these provisions for beneficiaries, for states, for “safety net” hospitals and clinics, and for MCOs are the focus of this analysis. The budgetary and policy context in which these changes were enacted is discussed elsewhere.²

1. Summary

The Balanced Budget Act did not launch the shift of Medicaid from fee-for-service to managed care. That transition has been under way for several years, prompted largely by state efforts to restrain Medicaid expenditure growth and nurtured by federal waivers.³ A recent Urban Institute analysis finds that between 1991 and 1996, enrollment of Medicaid beneficiaries in managed care nationally grew from 9.5 percent to 40.1 percent of total Medicaid enrollment.⁴ Even before passage of the Balanced Budget Act, CBO projected that, between fiscal years 1996 and 2002, federal matching payments to Medicaid MCOs would increase, on average, more than 15 percent annually, from $7 billion, or 11 percent of federal spending on Medicaid benefits, to $17 billion, or 14 percent.⁵

What the Balanced Budget Act has done is to alter fundamentally the managed care policy options available to states under the federal Medicaid statute. In the past, states that wanted to require Medicaid beneficiaries to enroll in MCOs that do business mainly or exclusively with Medicaid had to obtain a waiver from the Secretary of Health and Human Services (HHS). Under the Balanced Budget Act, they will now be able to do so without seeking a waiver. State managed care initiatives currently rely heavily on the use of mostly Medicaid MCOs. In 1996, for instance, 7.7 million Medicaid beneficiaries were enrolled in 355 fully capitated managed care plans in 35 states, according to a recent analysis by Mathematica Policy Research. Of these, 3.6 million, or 48 percent, were in 156 managed care plans in which Medicaid beneficiaries accounted for more than 75 percent of total enrollment.⁶ The Balanced Budget Act gives states the flexibility to rely more heavily on MCOs that primarily or exclusively enroll Medicaid beneficiaries. These could include MCOs that are for-profit, MCOs that are owned by non-profit or public “safety net” providers, as well as MCOs specializing in particular services like mental health.

Under the Act, states that want to limit Medicaid beneficiaries living in urban areas to a choice between two MCOs can do so without seeking a waiver from the Secretary of HHS. States can also restrict beneficiaries living in rural areas to a single MCO. In either case, all the MCOs that a state allows to participate may do business primarily or exclusively with Medicaid. For this purpose, the managed care plans with which the state contracts can be fully capitated – that is, at financial risk for providing hospital, physician, and other covered services to Medicaid beneficiaries – or a primary care case manager (PCCM), which does not assume financial risk for the provision of covered hospital services.

This new authority translates into additional bargaining power for state Medicaid programs vis-a-vis managed care plans. States can use this leverage to obtain more favorable rates from participating plans and to limit participants to those that demonstrate the highest levels of quality in services provided. However, this bargaining power can also raise the financial rewards to winning MCOs substantially, by limiting competition, thus giving each MCO a far larger market share and a heftier revenue stream. The Medicaid managed care business can be extremely lucrative.⁷ The potential for favorable results in the Medicaid market has attracted venture capital firms, where, as a rule of thumb, the expected rate of return is roughly one and one-half to three times the normal market rate of return.⁸ This venture capital will help finance new entrants into the Medicaid managed care market as well as the expansion of firms already participating.

One attraction of Medicaid managed care as an investment opportunity is that the conversion of Medicaid beneficiaries into mandatory MCO enrollees creates large monthly flows of capitation payments. An MCO with a mandatory enrollment of, say, 30,000 Medicaid-eligible women and children at an average capitation rate of $90 per month will realize a monthly cash flow of $2.7 million and annual revenues of $32.4 million without accounting for interest. The prospect of such large revenue streams — and the potential returns to be realized in the Medicaid managed care business — are likely to prove highly attractive in many states. As new entrants seek to acquire market share and incumbent plans attempt to protect or expand their existing positions by bringing financial and other resources to bear, the state Medicaid contracting process requires careful monitoring to assure its integrity.

The Medicaid managed care business is not always financially rewarding. There is considerable variation from state to state in the Medicaid payment and regulatory policies toward MCOs. This in turn produces variations in the attraction of Medicaid as a business proposition for managed care plans. A recent review of Medicaid managed care in the trade press indicates that some investor-owned MCOs have either halted new Medicaid enrollment or withdrawn from the Medicaid market altogether in a number of states, including Arizona, Illinois, New York, Ohio, Oregon, and Tennessee. The article attributes this trend primarily to low Medicaid payment rates.⁹

The Balanced Budget Act alters the statutory options available to states with respect to Medicaid managed care, but it does not change the sometimes conflicting interests of states in pursuing this policy path. On the one hand, states have an interest in ensuring that their low-income families have access to basic health care services. Medicaid managed care, when properly implemented, can improve both the accessibility and quality of basic health care services for Medicaid beneficiaries, particularly in those communities in which the quality and continuity of fee-for-service care are substandard.

On the other hand, states want to limit their Medicaid expenditures. The shift from fee-for-service to managed care enables them to curb Medicaid spending on a per beneficiary basis without formally and publicly narrowing the benefits package that they offer under their Medicaid programs. States also have an interest in limiting per beneficiary payments to MCOs and allowing the MCOs to narrow the covered services enrollees actually get. How these sometimes conflicting interests are resolved will vary from state to state.

This analysis describes the new legal and policy framework within which the shift of state Medicaid programs from fee-for-service to managed care will take place over the next few years. The analysis does not duplicate section-by-section summaries of the Balanced Budget Act’s Medicaid managed care provisions.¹⁰ Instead, it focuses on those provisions that are likely to have the most influence in shaping the transition to managed care and its impact on Medicaid beneficiaries:

• standards relating to state procedures for contracting with MCOs,
• standards for MCO organizational qualifications,
• standards relating to Medicaid payment rates for MCOs,
• standards relating to accessibility and quality of care in MCOs,
• beneficiary protections,
• accountability of MCOs for compliance with these standards, and
• provisions affecting safety net providers.

The interpretation of many of these provisions here is necessarily preliminary, since as of December 19, 1997, the Health Care Financing Administration (HCFA) has issued administrative guidance to the states or to MCOs with respect to only some of these amendments.¹¹

Endnotes

1. CBO, Budgetary Implications of the Balanced Budget Act of 1997, August 12, 1997. CBO does not attribute any federal savings to these provisions. In CBO’s view, the only budget effect of the legislation’s Medicaid managed care provisions is to increase federal spending somewhat ($0.1 billion over five years and $0.3 billion over ten) due to the requirement that Medicaid MCOs pay for hospital emergency visits whenever a “prudent layperson” would seek emergency care. 2. Andy Schneider, Overview of Medicaid Provisions in the Balanced Budget Act of 1997, P.L. 105-33, Center on Budget and Policy Priorities, Revised, September 8, 1997. www.cbpp.org/908mcaid.cfm. 3. For a detailed state-by-state survey of the scope of Medicaid managed care, see Jane Horvath et al., Medicaid Managed Care: A Guide for States, 3rd Edition, National Academy for State Health Policy, January 1997 4. Stephen Zuckerman, Alison Evans, and John Holahan, Questions for States as They Turn to Medicaid Managed Care, Urban Institute, August, 1997. 5. CBO Memorandum, Behind the Numbers: An Explanation of CBO’s January 1997 Medicaid Baseline, April 1997, p. 9. 6. Suzanne Felt-Lisk and Sara Yang, “Changes in Health Plans Serving Medicaid, 1993-1996,” Health Affairs, September/October 1997, at 127. 7. A recent report on a Medicaid-only MCO operating in Philadelphia found that between 1989 and 1996, the organization had generated pretax profits of $119 million (a return of 7,600 percent on a $200,000 investment, according to a 1994 audit), and had paid its four founders a total of $26.8 million in bonuses. Craig McCoy and Karl Stark, “An HMO Finds Lots of Money in Poverty,” Philadelphia Inquirer, August 3, 1997. A recent review of a Medicaid MCO contract by the HHS Inspector General found that one contractor realized a profit of $22.9 million over a three-year period, exceeding the IG’s “benchmark for reasonableness” by $4 million. Office of Inspector General, Department of Health and Human Services, State of Wisconsin’s Medicaid Managed Care Program Financial Safeguards, February 1997, p. 3. 8. For example, venture capital firms have invested $38 million in Americaid Community Care, which targets the Medicaid market in large urban areas like Houston and Chicago. A managing partner of Acacia Venture Partners of San Francisco, which has invested $5.5 million in Americaid, believes that Medicaid is “an exciting market, one largely ignored by the large, commercial HMOs.” Debra Gordon, “Virginia Beach-based HMO Takes the Medicaid Gamble,” The Virginian-Pilot, July 26, 1997. 9. The article quotes a health stock analyst as follows: “States have gotten reckless in cutting rates because they couldn’t care less about the Medicaid population. Only the worst HMOs, those that desperately need Medicaid will stay in.” Harris Meyer, “Medicaid: States Serve Up a Real Turkey,” Hospitals and Health Networks, November 20, 1997, p. 22. 10. For a summary section-by-section overview, see Sara Rosenbaum and Julie Darnell, A Comparison of the Medicaid Provisions in the Balanced Budget Act of 1996 (P.L. 105-33) With Prior Law, Kaiser Commission on the Future of Medicaid, September 1997. For a detailed section-by-section analysis, see National Health Law Program, National Center for Youth Law, National Senior Citizens Law Center, and Center for Medicare Advocacy, The Balanced Budget Act of 1997 – Reshaping the Health Safety Net for America’s Poor, October 1997 at www.healthlaw.org. 11. This guidance currently takes the form of letters to state Medicaid Directors. Copies are available on the HCFA Website, www.hcfa.gov/medicaid/bbahmpg.cfm.

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Overview of Medicaid Managed Care Provisions in the Balanced Budget Act of 1997

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National Perspectives on Medicaid Managed Care

• Report: National Perspectives on Medicaid Managed Care

11. Implications For Safety Net Providers

Medicaid’s transition from fee-for-service to managed care has enormous implications for safety net providers – those hospitals and clinics that deliver basic health care to large numbers of the uninsured. Medicaid has been a major revenue source for many of these providers, because it has reimbursed for the care and services they deliver to low-income patients who, without Medicaid coverage, generally would have no other source of payment. The revenues from these Medicaid patients often allow these hospitals and clinics to maintain the staffing, equipment, and other capacity to serve the uninsured. Loss of some or all of these Medicaid revenues due to lower payment rates for beneficiaries or to their diversion elsewhere could lead to the contraction of service capacity or, in extreme cases, closure of safety net facilities. As a result, the uninsured in these communities will have much greater difficulty in accessing needed care.

Current state practices and policies with respect to safety net providers vary. A 1996 survey by the National Academy of State Health Policy found that, in the 38 states with Medicaid risk contracting programs, 30 states reported that federally-qualified health centers participated as contractors or subcontractors in these programs; 22 states reported that community health centers or rural health clinics participated; and 256 states reported that local health departments participated. The survey found that few states reported requiring Medicaid MCOs to contract with any particular safety net providers.⁵⁸

The Balanced Budget Act does not articulate a clear policy for the support of safety net providers. It contains some provisions intended to give states the ability to reduce Medicaid payments to these providers, and it contains some provisions intended to protect these providers from harm at the hands of Medicaid MCOs. The policies toward “safety net” hospitals differ from those toward “safety net” clinics. In each case, the real-world impact of these changes will vary from community to community and state to state.

Disproportionate Share Hospitals

The Balanced Budget Act contains a number of provisions designed to achieve federal savings by reducing Medicaid reimbursement to hospitals generally, and to “disproportionate share” hospitals like public and children’s hospitals in particular. The Act repeals the so-called Boren amendment, which required “reasonable and adequate” payments to hospitals for inpatient care delivered to Medicaid patients. (This change is not likely to have much effect on hospital Medicaid revenues in states with high managed care penetration because, under HCFA interpretation, MCOs were not subject to the Boren amendment in setting payment rates to affiliated hospitals.) The Act still requires states to make additional payments to hospitals serving high volumes of Medicaid or uninsured patients, but it limits the federal Medicaid matching funds available for these DSH payments in each state.⁵⁹

The Act does not require Medicaid MCOs to contract with DSH hospitals or, if they elect to do so, to pay them any particular rate or to guarantee them a certain volume of patient referrals. In general, the Act leaves it to Medicaid MCOs and DSH hospitals to work out any affiliations, subject to the following constraints. (As in the case of other MCO performance standards, these provisions do not apply in states currently operating section 1115 waivers or under current section 1915(b) waivers.)

DSH Payments

States must make DSH payments directly to DSH hospitals rather than funneling them through MCOs.⁶⁰ Direct payment is obviously beneficial to DSH hospitals, as it eliminates any possibility of delay or diversion of DSH payments by an MCO.

Emergency Services

Both MCOs and PCCMs must provide coverage for emergency services “without regard to prior authorization or the emergency care provider’s contractual relationship with” the MCO or the PCCM. Emergency services are defined broadly as those needed to “evaluate or stabilize” an emergency medical condition that a “prudent layperson” could reasonably expect to require immediate medical attention. This requirement should protect DSH hospitals from MCOs that might deny payment to unaffiliated hospital emergency rooms for care provided to Medicaid enrollees (even though the cost of that care is part of the MCO’s Medicaid capitation rate). It applies to MCO or PCCM contracts entered into or renewed on or after October 1, 1997.

Timely Payments

MCOs must pay hospitals and other health care providers on a timely basis for services provided to those Medicaid enrollees who are covered under their risk contract with the state. As with state Medicaid reimbursement to fee-for-service providers, timely means that the MCO pays 90 percent of “clean” claims (for which no further substantiation is required) within 30 days and 99 percent within 90 days. This requirement should help protect DSH hospitals from cash flow problems resulting from long delays in payment by MCOs for emergency care or other covered services, whether or not the hospital is affiliated with the MCO whose enrollee it treats.

Default Enrollments

As described in section 4, the Act contains provisions related to “default” or “auto” enrollment in the case of states implementing mandatory managed care under section 1932. These provisions require that states, in the process of enrolling beneficiaries who do not choose among the MCOs offered to them, “take into consideration maintaining . . . relationships with providers that have traditionally served [Medicaid] beneficiaries.” DSH hospitals are not expressly referenced, but they are surely among the providers that have “traditionally” served beneficiaries. In states that implement this provision, it could make DSH hospitals attractive as affiliates to those managed care plans seeking to increase the number of beneficiaries they enroll through the default enrollment process.

Liberalized Solvency Requirements

The Act’s provisions relating to emergency services and timely payments should be helpful to DSH hospitals that are not themselves MCOs. For those DSH hospitals that choose to operate as an MCO, capitalization and cash reserve requirements relating to state insolvency standards for health maintenance organizations or insurers may be a concern. The Act specifies that, as a general rule, MCOs meet state-established solvency standards for private HMOs or be state-certified as a “risk bearing entity.” However, two exceptions are relevant to DSH hospitals. First, any organization that is a “public entity” is not subject to the solvency standards applicable to private HMOs or risk bearing entities; this is obviously relevant to DSH hospitals operated by counties or localities. Second, any DSH hospital, public or private, that qualifies as a “provider-sponsored organization” is exempt from these solvency standards. Presumably, a DSH hospital could qualify as a PSO under the new Medicare provisions in the Balanced Budget Act or under relevant state law.

Federally-Qualified Health Centers

As in the case of Medicaid DSH hospitals, the Balanced Budget Act contains changes designed to reduce federal spending on payments to federally qualified health centers. Among these are federally funded community and migrant health centers, health clinics run by Indian tribes or urban Indian organizations, and urban or rural primary care clinics that meet the requirements applicable to community health centers but do not receive federal grant funds. These requirements include providing primary care services to people living in an FQHC’s service area, regardless of their ability to pay. Though the Act retains the current legal requirement that state Medicaid programs cover the services provided by FQHCs, it phases out the requirement that states pay FQHCs at a rate that fully reflects their costs of delivering care to Medicaid patients. CBO assumes that states will take advantage of this flexibility to reduce payments to FQHCs, yielding some federal savings as well.

Emergency Services

States may choose to cover FQHC services through contracts with MCOs or “carve out” these services from these contracts. In either case, the Act does not require MCOs to contract with FQHCs, nor does it address the terms of any contractual arrangements MCOs might elect to enter into with FQHCs. The Act does, however, include a few provisions that should help to maintain the fiscal viability of FQHCs as state Medicaid programs transition to managed care. (In contrast to the situation with respect to DSH hospitals, these provisions appear to apply in states operating under section 1115 or section 1915(b) waivers.)

Payment Rates

Under current law, state Medicaid programs must cover the services provided by FQHCs and must pay participating FQHCs 100 percent of the cost of delivering covered services to Medicaid patients. The Act phases out this requirement beginning in fiscal year 2000, when states are allowed to pay only 95 percent of costs. The phase-out continues through fiscal year 2003, when states are permitted to pay only 70 percent of costs, and then repeals the requirement altogether effective October 1, 2003. During this same “transitional” period – October 1, 1997 through October 1, 2003 – the Act sets forth two requirements related to reimbursement of FQHCs subcontracting with Medicaid MCOs.

First, MCOs that enter into contracts with FQHCs must make payments on behalf of Medicaid enrollees treated by the FQHCs that are “not less than the level and amount of payments” the MCO would make for the same services if delivered by another provider within the MCO’s network. Second, the Act requires the state Medicaid program to supplement, on a quarterly basis, the payment made by the MCO to the FQHC, so that the total amount the FQHC receives for treating the MCO’s enrollees equals what it would be entitled to get had the patient been a fee-for-service beneficiary. For example, if in fiscal year 1999 the MCO paid its FQHCs 90 percent of cost, the state would have to provide the other 10 percent. These requirements do not guarantee the FQHC any defined volume of Medicaid patients or any aggregate amount of Medicaid revenues. But they do, however, attempt to ensure that, during the transition period, FQHCs do not receive less for treating MCO Medicaid enrollees than for beneficiaries in fee-for-service arrangements.

Timely Payments

The requirements for timely payment by MCOs to DSH hospitals described above also apply to FQHCs. Thus, MCOs must pay 90 percent of the clean claims submitted by FQHCs for covered services provided to MCO Medicaid enrollees within 30 days of receipt, and 99 percent within 90 days of receipt.

Default Enrollment

As with DSH hospitals, the Act provides for default enrollment processes that have the potential to give some priority to FQHCs. The Act requires that states using the section 1932 route to mandatory managed care assign beneficiaries that do not choose among MCOs offered to them in a way that “takes into consideration maintaining existing provider-individual relationships or relationships with providers that have traditionally served [Medicaid] beneficiaries.” FQHCs have patient relationships with many Medicaid beneficiaries and have traditionally served them. MCOs that contract with, or are owned by, FQHCs, could potentially benefit from this statutory standard by enrolling beneficiaries (including patients who they have served in the past) who have failed to select an MCO.

Liberalized Solvency Requirements

As with DSH hospitals, the Act provides for liberalized solvency requirements for FQHCs that want to operate their own MCOs rather than contract with MCOs owned by hospitals or other providers or by investors. (Currently, FQHCs own or operate between 20 and 30 Medicaid MCOs; in six states, these MCOs have the largest Medicaid enrollment.) The Act provides that the solvency standards generally applicable to MCOs – those set by the state for private HMOs or for risk bearing entities – do not apply to an MCO that “is or (is controlled by)” one or more FQHCs and that meets solvency standards “established by the State for such an organization.”

Conclusion

Implementation of the Medicaid managed care provisions of the Balanced Budget Act presents HCFA and the states with a daunting set of implementation issues. HCFA, which is also responsible for implementing the Health Insurance Portability and Accountability Act of 1996 (P.L. 104-191), the Medicare provisions of the Balanced Budget Act, and the new Child Health Block Grant, will have significant new responsibilities with respect to Medicaid. A major task will be to issue administrative guidance on these managed care provisions, as well as monitor and enforce state and MCO compliance with that guidance. HCFA action on these Medicaid managed care provisions, is particularly important: without timely federal guidance and monitoring, in some states federal Medicaid dollars may inadvertently finance the underservicing of low-income women and children and other Medicaid beneficiaries who have been required to enroll in MCOs that do business only with Medicaid.

From the state standpoint, the Balanced Budget Act provides broad new flexibility with respect to mandatory managed care. However, the Act also establishes a number of new federal requirements that may make state Medicaid agencies more accountable for their expenditure of federal Medicaid managed care funds. One is a reinstatement of the requirement for federal prior approval of all state managed care contracts in excess of $1 million. Another concerns new conflict-of-interest rules governing state officials involved in Medicaid managed care contracting. Yet others involve new management information system reporting requirements and a new requirement to develop a quality assessment and improvement strategy consistent with federal standards. The extent to which these requirements actually improve the performance of state agencies and ultimately the performance of contracting MCOs depends largely on how clearly and effectively HCFA (and the HHS Inspector General) implement these requirements.

A critical first-priority issue for both HCFA and the Inspector General is the availability of accurate, policy-relevant data. Currently, most states do not report on a quarterly basis the number of beneficiaries enrolled in MCOs or the cost of those enrollees. Similarly, states generally do not report such information by beneficiary group (e.g., children, adults, disabled, or elderly) or by type of managed care arrangement (e.g., MCO or PCCM). Without this basic information, it is extremely difficult for federal officials or policy analysts to monitor the Medicaid program’s transition to managed care.⁶¹ The Secretary of HHS has the statutory authority to require such information; the Medicaid statute has long required state Medicaid agencies to “make such reports, in such form and containing such information, as the Secretary may from time to time require.” This authority was augmented by provisions of the Balanced Budget Act relating to upgrading the state Medicaid management information systems. As the amount of federal Medicaid matching funds flowing through Medicaid MCOs increases, it will become even more essential that the Secretary use this authority to gain a current understanding of the expenditure of those funds and the patterns of enrollment of Medicaid beneficiaries.⁶²

Ultimately, the test of the Balanced Budget Act’s Medicaid managed care changes will come not during the nation’s current economic expansion, but when regional or national economic growth slows significantly, driving down state revenues and increasing the number of people enrolled in MCOs. Will the fiscally pressed states maintain capitation rates high enough to enable even MCOs made up exclusively of Medicaid beneficiaries to provide covered services? If states freeze or even reduce Medicaid capitation rates, how will MCOs react? Will these MCOs leave the program altogether, or will they begin to reduce or withhold covered services from their enrollees? Whatever the response, how will beneficiary access to care, beneficiary health status, and the fiscal capacity of safety net providers be affected? The answers to these questions will not be known for several years. In the interim, careful monitoring of Medicaid’s shift from fee-for-service to managed care will be essential to assess and refine the Balanced Budget Act’s provisions.

Endnotes

58. Jane Horvath and Neva Kaye, Medicaid Managed Care: A Guide for States, 3rd Edition, National Academy for State Health Policy, 1997, pp. I-19 – 1-20. 59. Andy Schneider, Stephen Cha, and Sam Elkin, Overview of Medicaid “DSH” Provisions in the Balanced Budget Act of 1997, P.L. 105-33, Center on Budget and Policy Priorities, September 3, 1997, available on this website 60. An exception is made for “payment arrangements” in effect on July 1, 1997, which appears to apply to Alabama and Wisconsin. 61 As analysts at the Urban Institute recently noted, “Existing national data sources tell us very little about who [Medicaid beneficiaries enrolled in managed care] are, what types of services they use, and how much was spent on these services. As more beneficiaries are enrolled into managed care plans, this problem will be exacerbated.” David Liska et al., Medicaid Expenditures and Beneficiaries: National and State Profiles and Trends, 1990-1995, Kaiser Commission on the Future of Medicaid, November 1997, p. xiii. 62. In connection with the implementation of the Child Health Block Grant, HCFA has issued Medicaid reporting forms calling for the number of unduplicated children and adults enrolled in managed care arrangements, as well as Medicaid payments to MCOs. HCFA, Financing Provisions of the Child Health Insurance Program (CHIP) and Related Medicaid Program Provisions, December 5, 1997 Draft, Forms HCFA-64EC, HCFA-64-EA, and HCFA-37.3.

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Overview of Medicaid Managed Care Provisions in the Balanced Budget Act of 1997

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State Children’s Health Insurance Program Summary

November 1997

Nearly 10 million children are uninsured, often resulting in difficulties in obtaining needed health care. To expand coverage to low-income uninsured children, Congress enacted the State Children’s Health Insurance Program (CHIP) as part of the Balanced Budget Act (BBA) of 1997 (P.L. 105-33). This new program allocates $20.3 billion in federal matching funds over five years to states to expand insurance for children. States can use the federal funds to expand coverage either through a separate state program or by broadening their Medicaid programs — or both.

Eligibility

The intent of CHIP is to expand health insurance coverage to uninsured children under age 19 in families with incomes below 200% of poverty (Figure 1). Children with private insurance or who are covered by or qualify for Medicaid are ineligible for CHIP, as are those who are residents of public institutions or whose families are eligible for state employee health benefits. Undocumented children and legally resident children arriving in the U.S. after August 22, 1996 are ineligible for coverage but may qualify for emergency Medicaid assistance. States that implement their child health insurance programs through Medicaid may use federal funds to cover legally resident children in the country prior to August 22, 1996.

States that choose to operate a separate state child insurance program can establish eligibility based on geographic area, age, income and resources, residency, and disability status, as well as limit duration of coverage. States cannot exclude children based upon a preexisting condition or diagnosis, and cannot cover higher income children before lower income children.

If states use the Medicaid option, children become entitled to full Medicaid coverage. States that have already broadened Medicaid income eligibility levels above 150% of the federal poverty level (FPL) can expand coverage to children up to 50 percentage points above the current level. For example, a state with eligibility set at 175% FPL could expand to 225% FPL.

Benefits and Cost-sharing

The benefit package options available to states fall into three general categories: Benchmark, benchmark-equivalent, or Medicaid.

• Benchmark Packages: States can offer one of three existing benefit packages: including the Federal Employees Blue Cross/Blue Shield PPO plan; coverage available to state employees; or coverage offered by the HMO with the state’s largest commercially enrolled population.
• Benchmark-Equivalent Coverage: States can use a package with aggregate value greater than or equal to a benchmark plan. Hospital, physician, laboratory and x-ray, and well baby/child services must be included at a value at least actuarially equivalent to the benchmark benefit package. If prescription drugs, mental health, vision, and hearing services are included in the benchmark plan, then they must be part of the benchmark-equivalent coverage with a value of at least 75% of the benchmark plan’s actuarial value.
• Medicaid: States that expand Medicaid must provide the complete benefit package, which includes well-child care, immunizations, prescription drugs, doctor visits, hospitalization, and EPSDT, as well as long-term care for disabled children. The Medicaid benefit package for children is broad and should satisfy the benchmark requirement in a state that administers a separate CHIP program.

The Secretary has the authority to approve a different benefit package that is determined to be appropriate for low-income children. The existing New York, Florida, and Pennsylvania child health programs are deemed to satisfy federal requirements for benefits.

Under the new program, states cannot impose cost-sharing for preventive services including well-baby and well-child care and immunizations. For children with family incomes below 150% FPL, cost-sharing must be “nominal” as under the Medicaid statute. Medicaid currently permits premiums of $15 to $19 per month per family and co-payments of up to $3 per service. Cost-sharing for children with incomes above 150% FPL can be imposed based on an income-related sliding scale, but total cost sharing cannot exceed 5% of family income. Coverage can be provided directly by the state Medicaid program, an insurer, or any other entity considered to be qualified by the state.

Financing

The BBA authorizes $20.3 billion in federal funds from FY 1998 through FY 2002 and $19.4 billion over the second five years. Over the ten-year period, the funds are allocated as follows: $4.275 billion per year in FY 1998-2001, falling to $3.15 billion annually in FY 2002 through 2004, and then rising to $4.05 billion from FY 2005 through 2006, and reaching $5 billion for 2007, for a total of $40 billion.

Annual federal allocations to states are based on the states’ share of low-income and uninsured children using estimates from the Current Population Survey, conducted by the U.S. Census Bureau. The allotment formula changes over time to adjust for reductions in the number of uninsured children.

States do not receive their allotments automatically. States must have their child health plan approved by HHS and are required to contribute state funds in order to draw down, or “match” their federal allotment. The state share cannot include beneficiary cost-sharing and is subject to the same provider tax and donation limitations specified in the Medicaid statute.

Under the new state program, states receive an “enhanced” federal matching rate based on their Medicaid matching rate. The CHIP enhanced rate essentially reduces by 30 percent the share states pay as compared to what they would contribute under their Medicaid match. For example, a state with a federal match of 60% under Medicaid would receive an “enhanced” rate of 72% under the new program. In essence, the state would pay 28 cents of every dollar spent under the new children’s program. No state may receive a matching rate greater than 85% and the minimum annual payment for a state is $2 million. States can receive an enhanced matching rate for providing Medicaid coverage to an expanded group of children. All Medicaid rules, including the entitlement to coverage, would apply to the newly covered group of children. States would continue to receive the regular Medicaid matching rate after their CHIP allotment was depleted.

While the states have considerable latitude in designing and structuring their CHIP programs, there are some limits on what federal CHIP payments can be used for:

• No more than 10 percent of federal payments can be used for outreach, administrative costs or direct service payments to clinics or hospitals. The Secretary can authorize waivers to allow states to create community-based programs or to purchase family coverage.
• States cannot adopt Medicaid eligibility criteria that are more restrictive than those in effect as of June 1, 1997.
• Maintenance of effort is also required in state-only programs in New York, Pennsylvania, and Florida.
• Abortions cannot be covered by federal or state funds except to save the life of the mother or in the case of rape or incest.

Child-Related Medicaid Provisions

In addition to the creation of the new state child health insurance program, several changes to Medicaid were made to strengthen coverage for children under the Balanced Budget Act of 1997. States can now opt to:

• Extend presumptive eligibility to children — This means that services provided to uninsured children will be covered by Medicaid before eligibility determination is complete. For children who are determined to be eligible for the new program, the costs will be paid through new program funds.
• Offer 12 month continuous eligibility to children — States can provide up to one year of continuous eligibility for children under Medicaid, regardless of any changes in family income during that period.
• Accelerate the phase-in to cover poor children born before September 30, 1983. In the past, states could cover these children under Section 1902(r)(2) at state option or through a Section 1115 waiver. The BBA of 1997 clarifies this option. Some 27 states have used these options to expand coverage to older children.

States must also restore Medicaid eligibility to disabled children who lost SSI under the 1996 welfare reform legislation. The Balanced Budget Act also includes numerous provisions that grant states increased flexibility over their Medicaid programs. These include the ability to mandate managed care enrollment without a waiver and greater control over provider payment through the repeal the Boren Amendment and a phase-out of cost-based reimbursement for Federally Qualified Health Centers.

Many Working Families Struggle To Get Needed Care And Pay Medical Bills

Three-Quarters of the Currently or Recently Uninsured Are in Working Families

Nearly Half of Uninsured Adults in Working Families Have Access or Bill Problems

Embargoed for release until: 10:00 a.m., EST, Monday, December 8, 1997

For further Information contact: Chris Ferris (202)347-5270 or Mary Mahon (212)606-3853

Washington, D.C.– Three in four American adults who do not have health insurance or who have experienced a recent gap in coverage are part of working families — they are either full- or part-time workers or the spouse of a worker — according to a new survey released by the Kaiser Family Foundation and The Commonwealth Fund. The Kaiser/Commonwealth 1997 National Survey of Health Insurance also finds that as a result of being currently or recently uninsured, many working-age adults and their families face barriers to getting or paying for needed health care.

“This survey serves as a reminder that the problems of the working uninsured are still with us,” said Drew Altman, President of the Kaiser Family Foundation. “The low-wage working uninsured deserve special attention when the country considers the next incremental step in expanding health insurance coverage.”

Going without health coverage is not a matter of choice for most of the uninsured. About half (51%) of all uninsured adults report that they do not have insurance because they cannot afford it. Another quarter (25%) say they do not have health insurance because they lost their job or their employer does not offer benefits. Only 4% are uninsured because they have poor health or were denied health benefits.

Families with incomes below the median U.S. family income of $35,000 are most affected by lack of insurance. Three in five (59%) adults in families who earned less than $20,000 annually were uninsured or had a recent gap (sometime in the past two years) in health coverage. One-third (31%) who earned between $20,000 and $35,000 annually also were currently or recently uninsured.

The survey also finds that low-wage working families are at high risk overall. Two in five (41%) adults in working families said they had problems paying medical bills or went without needed care in the past year. More than half (56%) of adults in low-wage working families who are uninsured, and 50% of those with a recent gap in coverage, had problems with access to care or paying medical bills in the last year.

“This survey shows us that people are not uninsured because of preexisting conditions or because they opted out of coverage,” explained Karen Davis, President of The Commonwealth Fund. “Many working families simply cannot afford the high cost of health insurance premiums.”

Insurance Matters

Lack of health insurance leads directly to barriers to health care and problems paying medical bills. Nearly half of the working uninsured (48%) report difficulties with access or costs, while only 15 percent of people who had continuous coverage report these problems. The survey also finds that nearly one-quarter (24%) of uninsured adults say they had not filled a prescription they needed in the past year. One in six (17%) report that they had to change their families’ way of life significantly to pay medical bills.

“Many uninsured working families incur unmanageable financial burdens due to medical emergencies or serious illness, or even worse, go without health care at all,” noted Davis.

Survey respondents who had temporary gaps in health coverage and were uninsured at some point in the past two years face problems similar to those of the currently uninsured. One in five (21%) did not fill a prescription in the past year, and two in five (40%) postponed care in the past year due to costs. By comparison, about one in four of the uninsured (24%) did not fill a prescription; about half (55%) had delayed care.

Medicare Scores Highly Compared to Insurance of Working Families

In marked contrast to the situation of working families, the elderly ages 65 and over covered by Medicare are much more satisfied with their health insurance coverage. Medicare, which provides coverage for the elderly ages 65 and older, results in beneficiaries having greater access to health care and better financial protections than most low- and moderate-income working families. Despite more serious health problems, for example, only 7 percent of the elderly report problems getting health care in the past year, compared with 20 percent of all adults under age 65, and 42 percent of uninsured working-age adults. Medicare beneficiaries are also much more likely to be very satisfied with their health insurance (64%) and choice of doctors (74%) than are adults with job-based health coverage or Medicaid beneficiaries.

Methodology:

The Kaiser/Commonwealth 1997 National Survey of Health Insurance, which was conducted between November 1996 and March 1997 by Louis Harris and Associates, Inc., was designed and analyzed by staff at the Kaiser Family Foundation and The Commonwealth Fund. The survey sample consisted of 4,001 adults ages 18 and older, including 3,761 adults surveyed by telephone and 240 in-person interviews of people without telephones in their homes. The data were weighted to the March 1996 Current Population Survey for accurate representation of Americans by sex, race, age, education, and health insurance status.

The Kaiser Family Foundation, based in Menlo Park, California, is a nonprofit, independent national health care philanthropy and is not associated with Kaiser Permanente or Kaiser Industries. The Foundation’s work is focused on four main areas: health policy, reproductive health, and HIV policy in the United States, and health and development in South Africa.

The Commonwealth Fund, a New York City-based national foundation, undertakes independent research on health and social issues. Its mission is to enhance the common good by looking for new opportunities to help Americans live healthy and productive lives, and to assist specific groups with serious and neglected problems.

This press release is also available on the World Wide Web at www.kff.org or www.cmwf.org. Copies of the release and the accompanying chart pack can be ordered from the Kaiser Foundation’s toll-free publications request line (800/656-4533). Ask for document #1347.

1997 National Survey of Americans on AIDS/HIV

Public Knowledge And Attitudes About AIDS/HIV : Survey II

Princeton Survey Research Associates For The Kaiser Family Foundation

Questionnaire and National Toplines

December 4, 1997

Methodology

The 1997 National Survey of Americans on AIDS/HIV was designed by staff of the Kaiser Family Foundation and conducted for the Family Foundation by Princeton Survey Research Associates. The survey was conducted by telephone with 1,205 adults (age 18 or older) nationwide between September 17-October 19, 1997. The margin of sampling error is plus or minus 3 percentage points.

The Foundation last surveyed Americans on AIDS/HIV in December 1995. Where available trend data or information are noted. Some select questions also provide further trend information from other sources, each source is noted by an appropriate footnote reference.

Select questions were asked of a random half of the respondents. These questions are identified by “Form 1” or “Form 2,” indicating which half answered that particular question. There were 598 respondents in the “Form 1” group and 607 respondents in the “Form 2” group. The margin of error for this split sample is plus or minus 4 percentage points.

National Topline

1. My first question is… What do you think is the most urgent health problem facing this nation today? (Open-end. Do not read answer categories. Wait for reply before probe) Is there another health problem you think is almost as urgent?

Current 12/95 1/90¹ 38 AIDS 44 49 38 Cancer 27 31 21 Health insurance/access/cost 25 13 16 Heart 11 na² 5 Drugs 4 17 3 Smoking/Cigarettes na na 2 Elderly 4 12 2 Excess weight/Obesity na na 2 Diabetes *³ na 14 Other 15 na 8 Don’t know/Refused 8 9

Total exceeds 100% due to multiple responses.

2. Now I’d like you to think about the way the problem of AIDS is affecting this country today. Do you think the problem of AIDS is about the same as it has been, that the country is making progress in this area, or that the country is losing ground?

Based on form 1 respondents.

Current 12/95 3/94⁴ 14 About the same 15 22 52 Country making progress 32 23 27 Country losing ground 48 49 7 Don’t know/Refused 5 6 100 100 100

3. Thinking about the way AIDS is affecting your local community today, is the problem of AIDS about the same as it has been, is your community making progress, is your community losing ground, or has AIDS never been a problem in your community?

Based on form 1 respondents.

Current 12/95 19 About the same 23 14 Community making progress 11 11 Community losing ground 18 41 Never been a problem 38 15 Don’t know/Refused 10 100 100

4. Now I’d like you to think about the way the problem of AIDS is affecting this country today. Do you think AIDS is a more urgent problem for the country than it was a few years ago, is it a less urgent problem, or is it about as urgent as it was?

Based on form 2 respondents.

48 More urgent 12 Less urgent 38 About as urgent 2 Don’t know/Refused 100

5. Thinking about the way the problem of AIDS is affecting your local community today, do you think AIDS is a more urgent problem for your community than it was a few years ago, is it a less urgent problem, is it about as urgent as it was, or has AIDS never been a problem in your community?

Based on form 2 respondents.

25 More urgent 9 Less urgent 28 About as urgent 25 Never been a problem 13 Don’t know/Refused 100

6. How serious a problem do you think AIDS is for people you know? For people you know, do you think AIDS is…(read)

Current 12/95 34 A very serious problem 43 19 A somewhat serious problem 17 17 Not too serious a problem, or 15 25 Not a serious problem at all? 22 5 Don’t know/Refused 3 100 100

7. Bearing in mind the different ways people can be infected with H-I-V, the virus that causes AIDS–how concerned are you, personally, about becoming infected with HIV? Are you…(read)

Current 12/95 5/91⁵ 24 Very concerned 22 27 17 Somewhat concerned 18 21 21 Not too concerned, or 22 22 38 Not at all concerned? 38 30 * Don’t know/Refused * * 100 100 100

8. Are you more concerned about becoming infected with HIV than you were a few years ago, less concerned, or about as concerned?

27 More concerned 24 Less concerned 47 About as concerned 2 Don’t know/Refused 100

9. Do you, yourself, have any sons or daughters aged 21 years or younger?

43 Yes 57 No * Don’t know/Refused 100

10. How concerned are you about a son or daughter becoming infected with HIV? Are you…(read)

Based on parents of children aged 21 or younger.

Current 12/95 52 Very concerned 53 21 Somewhat concerned 24 16 Not too concerned, or 10 11 Not at all concerned 11 * Don’t know/Refused 2 100 100 (n=541) (n=666)

11. Are you more concerned about a son or daughter becoming infected with HIV than you were a few years ago, less concerned, or about as concerned?

Based on parents of children aged 21 or younger.

46 More concerned 9 Less concerned 44 About as concerned 1 Don’t know/Refused 100 (n=541)

12. Do you think AIDS is a major threat to public health in this country today, or is not a major threat to public health?

83 Major threat 14 Not a major threat 3 Don’t know/Refused 100

13. I’m going to read a list of groups in your local community. For each one, please tell me how much you think they are doing to help fight against AIDS. As far as you know, how much are (insert first item — rotate) doing to help fight against AIDS? Is this group doing a lot, some, only a little or nothing at all? How much do you think (insert next item — rotate) are doing?

Based on form 1 respondents.

A lot Some Only a little Nothing at all DK/Ref. a. Local church or religious leaders 18 29 24 12 17 =100 b. Local government and political leaders 11 34 30 13 12 =100 c. Local public schools 23 34 20 6 17 =100 d. Local health care providers, such as doctors, health clinics and hospitals 38 32 12 4 14 =100

14. And how about those outside of your local community . . . As far as you know, how much is (insert items in order) doing to help fight against AIDS– a lot, some, only a little or nothing at all?

Based on Form 1 respondents.

A lot Some Only a little Nothing at all DK/Ref. a. Your state government 15 43 24 6 12 =100 b. President Clinton 21 39 21 8 11 =100 c. The federal government 20 42 23 6 9 =100

15. I’m going to read a list of groups in your local community. For each one, please tell me your impression of how much this group cares about the fight against AIDS and makes it a priority. First, what about… (insert first item — rotate)–is it your impression that they care a lot about the fight against AIDS, some, only a little or not at all? How much do you think (insert next item — rotate) care?

Based on form 2 respondents.

A lot Some Only a little Nothing at all DK/Ref. a. Local church or religious leaders 39 34 15 5 7 =100 b. Local government and political leaders 17 42 27 8 6 =100 c. Local public schools 44 31 12 4 9 =100 d. Local health care providers, such as doctors, health clinics and hospitals 59 25 7 3 6 =100

16. And what is your impression of how much those outside of your local community care about the fight against AIDS and make it a priority . . . (First/Next) (insert items in order)–do you think (it/he) cares a lot about the fight against AIDS, some, only a little, or not at all?

Based on form 2 respondents.

A lot Some Only a little Nothing at all DK/Ref. a. Your state government 22 53 19 3 3 =100 b. President Clinton 31 39 16 7 7 =100 c. The federal government 21 47 22 5 5 =100

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1997 National Survey of Americans on AIDS/HIV:Press Release Survey Part One Part Two Part Three Part Four Part Five Chart Pack

A national random-sample survey of 1205 adults, 18 years and older, that examines Americans views on AIDS. The findings show that although Americans see growing progress in the fight against the disease, AIDS is still viewed as an urgent health problem for the nation and spending on prevention, research, and treatment is strongly supported. The survey also looks at public support for AIDS prevention efforts, including condoms in schools and needle exchange. The survey was designed by staff at the Foundation and conducted by telephone by Princeton Survey Research Associates (PSRA) between September 17 and October 19, 1997. Additional questions, asked as part of a national omnibus telephone survey of 1,009 adults conducted November 20-23, 1997, are also reported on in the release.

Do Americans Think The AIDS Epidemic Is “Over”?

Many See Progress In Fight Against The Disease, Yet Support Still Strong For Spending On Prevention And Treatment

Though Still Number One, AIDS Now Tied with CancerAs Nation’s Most Urgent Health Problem

Embargoed For Release Until:10:00 am, ET, Thursday, December 4, 1997

Washington, DC — As new drugs have become available to help people with AIDS/HIV livelonger, advocates have worried that the public will perceive the epidemicas “over,” while others have questioned whether AIDS should receive specialstatus among the nation’s health concerns. Sixteen years since thebeginning of the epidemic, a new survey finds that while Americans seegrowing progress in the fight against the disease, they also continue toview AIDS as an urgent health problem for the nation and still stronglysupport spending on prevention, research, and treatment.

According to a Kaiser Family Foundation survey released today, the publicis far from thinking the AIDS epidemic is “over:” the vast majority — 88percent — give an emphatic no. But, a majority of Americans (52%) now dosee the country making progress in addressing the problems of AIDS. Only athird (32%) were as optimistic in 1995, when the Foundation surveyedAmericans on AIDS/HIV. And, in 1994, it was just a quarter (23%),according to a Times Mirror survey. Even so, the public continues to rankAIDS among the most serious health concerns facing the nation; although, itis now seen as more comparable with other diseases. Today, the samepercentages of Americans name AIDS (38%) as name cancer (38%) when askedwhat is the most urgent health problem facing the nation. Two years ago,AIDS was ranked first by 44 percent of the public, followed by cancer with27 percent. In 1990, 49 percent of the public said AIDS, and 31 percent,cancer, according to a Los Angeles Times poll.

“After more than a decade of fighting this deadly disease, Americans arelearning to live with AIDS. While the public continues to see AIDS as anurgent issue, it is no longer a viewed as an emergent one,” said SophiaChang, MD, MPH, Director of HIV Programs, Kaiser Family Foundation.

Support for government spending to help pay for drug therapies forlow-income people with AIDS is especially strong. Three quarters (73%) ofAmericans say the government should help pay for new AIDS treatmentsregardless of income-level; 20 percent say the responsibility should beleft to individuals and their families. Two thirds (64%) support spendingeven when told it would result in higher costs to the government; 29percent say the government cannot afford it.

Overall, a majority (51%) of the American people say the government spendstoo little money on AIDS (32% say “about the right amount;” 8% say “toomuch”). Forty percent (40%) say federal spending on AIDS is too low, ascompared to what is spent on other health problems such as cancer and heartdisease (35% say “about the right amount;” 11% say “too high”). This isdown from 1995, when 50 percent of Americans said not enough was spent onfighting the disease as compared to what is spent on other health concerns(31% said “about the right amount;” 12% said “too high”). Still, thereremain high levels of support today for spending in all areas of AIDSeducation, prevention, and treatment. When asked to choose a “toppriority” for HIV spending, the public favors devoting resources toresearch to find an AIDS vaccine (47%), followed by HIV/AIDS education andother prevention efforts (32%).

The survey also finds that most people — 89 percent — think that by nowall adults should know how to protect themselves from HIV infection, and 71percent think those who become infected today are more responsible fortheir circumstances than those infected earlier. While public sentimentleans toward greater personal responsibility, the public’s attitude towardpeople with AIDS is not punitive: a majority — 54 percent — do not thinkthat adults with AIDS/HIV should have to pay more of their medical billsthemselves than those infected years ago; 42 percent say should have topay more today.

Trends in AIDS/HIV.

For the first time this decade, in February of 1997,the Centers for Disease Control and Prevention (CDC) announced a decline inAIDS deaths in the United States. Deaths from AIDS among Americans, ages13 and older, declined 23 percent between 1995 and 1996. Declines werereported in all geographic areas, among men and women, among all racial andethnic groups, and in all risk and exposure categories. The number ofAmericans living with AIDS — almost a quarter of a million today –increased by 11 percent over the same time period. This increase in peopleliving with AIDS comes at a time when new drug therapies are available tohelp treat the disease and lengthen life. Protease inhibitors, a class ofdrug commonly used in combination therapies to treat people with HIV/AIDS,was approved by the Food and Drug Administration for use in this country inDecember 1995. The use of zidovudine (AZT) to prevent the transmission ofHIV from mother to child also appears to be having an impact. New AIDScases as a result of mother to child transmissions were recently reportedto have decreased by 43 percent between 1992 and 1996.

New Drug Therapies.

More people today (86%) than two years ago (75%) knowthat drug therapies are available to help people with AIDS live longer.The public is also more aware today that certain drugs can be taken bypregnant women with HIV to help prevent transmission to their babies: 49percent today, as compared to 30 percent in 1995.

Awareness about the availability of new drugs may be one reason the publicsees progress in the fight against AIDS: 44 percent of Americans today say”a lot” of progress has been made in keeping people with AIDS alive longer,up from 24 percent in 1995. However, most people believe that the newdrugs do not benefit everyone with AIDS/HIV: 79 percent say most peoplewho want the treatments are not getting them, and 58 percent say they arenot effective for most people who are taking them. The public also appearsto have a realistic understanding of the high cost of the new drugs: 42percent know the average monthly expense can be as high as $1000; 30percent think it is closer to $500 per month.

In spite of greater awareness about the drug therapies, the percentage ofAmericans who report having been tested for HIV has remained relativelyconstant over the last two years. Currently, two out of five people (38%)say they have ever been tested for HIV, including 16 percent in the lastyear; about the same percentages as reported being tested in 1995. Just 20percent of those surveyed say they have ever talked with a health careprovider about getting tested for HIV; two thirds (66%) of whom say theybrought the topic up themselves.

Needle Exchange.

Over the two years the Foundation has surveyed thepublic on needle exchange, Americans have remained supportive of these programs, which offer clean needles to IV drug users in exchange for usedneedles, as an AIDS prevention measure. As of the end of November, 64percent of the public favor needle exchange and 30 percent oppose. Earlierin the fall when the Foundation surveyed on needle exchange, 58 percentsupported and 38 percent opposed such programs. Two years earlier, 66percent supported needle exchange, and 30 percent opposed.

Public opinion on needle exchange, however, appears to be influenced byhow the issue is presented. When presented with the major arguments forand against needle exchange (including the criticism that needle exchangeprograms give tacit approval of illegal drug use) the differences levelout: in November, 48 percent support and 46 percent oppose. A few monthsearlier, 43 percent support and 53 percent oppose needle exchange whengiven these same arguments. Better knowledge of the scientific evidence onneedle exchange, on the other hand, appears to increase support. Afterhearing that organizations such as the National Academy of Sciences haveconcluded that needle exchange programs reduce HIV infection among IV drugusers without increasing their drug use, support for the programs in themost recent survey increases. Among the first group, those asked aboutneedle exchange without arguments, support increases from 64 percent to 73percent (20% still oppose); among those given both sides of the argument,support increases from 48 percent to 60 percent (32% still oppose). (Thisquestion was not asked in the earlier surveys.)

Today, a majority of Americans — 61 percent — think current law shouldbe changed to allow state and local governments to decide for themselveswhether federal funds should be used for needle exchange.

Other Prevention Efforts.

Americans support efforts to encourage condomuse to help stop the spread of HIV:

• 62 percent say the TV networks should accept condom advertising (33%say should not);
• 55 percent say when movies and TV shows deal with sexual relationshipsthere should be more references to condoms (32% say there are enoughreferences now); and
• 44 percent say condoms should be made available in high schools, andanother 52 percent say only information about AIDS prevention should beprovided (1% oppose both).

Parents, Kids, and AIDS

The theme for this year’s World AIDS Day, held on Monday, December 1, was”Give Children Hope in a World with AIDS.” According to the Kaiser FamilyFoundation survey, parents remain a worried group about AIDS, especiallywhen it comes to their children: 52 percent of those with children 21 andyounger say they are “very concerned” about their son or daughter becominginfected with HIV, and an additional 21 percent say they are “somewhatconcerned.” Close to half — 46 percent say their concerns have heightenedfrom just a few years ago. Most parents — 57 percent — say they needmore information about what to discuss with their children about AIDS.

When it comes to other AIDS prevention efforts, parents are among the mostsupportive: 47 percent favor providing condoms in high schools; 64 percentsay more references to condoms should be included in movies and televisionshows that deal with sexual relationships; and 66 percent think condom adsshould be aired on network television. In total, 97 percent think someinformation about AIDS and how it is spread should be provided to teens inhigh school.

Methodology

The Kaiser Family Foundation’s 1997 National Survey of Americans onAIDS/HIV is a random-sample survey of 1205 adults, 18 years and older. Itwas designed by staff at the Foundation and conducted by telephone byPrinceton Survey Research Associates (PSRA) between September 17 andOctober 19, 1997. Additional questions were asked as part of a nationalomnibus telephone survey of 1,009 adults conducted November 20-23, 1997.The margin of sampling error for both national samples are plus or minus 3percent. The margin of sampling error may be higher for some of thesub-sets in this analysis.

The Kaiser Family Foundation, based in Menlo Park, California, is anindependent national health care philanthropy and not associated withKaiser Permanente or Kaiser Industries. The Foundation’s work is focusedon four main areas: health policy, reproductive health, and HIV in theUnited States, and health and development in South Africa.

Copies of the questionnaire and top line data for the findings reported inthis release available by calling the Kaiser Family Foundation’spublication request line at 1-800-656-4533 (Ask for #1346). Also availableis the top line data from the Kaiser Family Foundation’s 1995 NationalSurvey of Americans on AIDS/HIV (Ask for #1118).

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1997 National Survey Of Americans on AIDS/HIV:Press Release Survey ChartPack Library Index

This report describes the new legal and policy framework within which the shift of state Medicaid programs from fee-for-service to managed care will take place over the next few years.