The Impact of State Policy on the Costs of HIV Infection

Abstract

There is substantial variation in the generosity of public assistance programs that affect HIV+ patients, and these differences should affect the economic outcomes associated with HIV infection. This article uses data from a nationally representative sample of HIV+ patients to assess how differences across states in Medicaid and AIDS Drug Assistance Programs (ADAP) affect costs and labor market outcomes for HIV+ patients in care in that state. Making ADAP programs more generous in terms of drug coverage would reduce per patient total monthly costs, mainly through a reduction in hospitalization costs. In contrast, expanding ADAP eligibility by increasing the income threshold would increase the total cost of care. Expanding eligibility for Medicaid through the medically needy program would increase per patient total costs, but full-time employment would increase and so would monthly earnings. The authors conclude that more generous state policies toward HIV+ patients—especially those designed to provide access to efficacious treatment—could improve the economic outcomes associated with HIV.