Medicaid, Title XIX of the Social Security Act, is the largest source of public financing for HIV/AIDS care in the United States. Created in 1965, Medicaid is a jointly funded, jointly administered federal–state health insurance program for low-income people who meet one or more of several categorical eligibility requirements, including disability. The program is administered through the Centers for Medicare & Medicaid Services (CMS). Through Medicaid, the federal government provides matching funds to states that meet certain minimum federal standards in operating their Medicaid programs. States have broad flexibility in designing their Medicaid programs, and consequently there is significant variation in eligibility, benefits, provider payments, and other aspects of the program at the state level (Westmoreland, 1999; Kaiser Commission on Medicaid and the Uninsured, 2001). State Medicaid policies vary considerably even among similar-sized and or adjacent states. Thus, a person who is eligible for Medicaid in one state might not be eligible in another state; and the services provided by one state may differ from those of another state.2

Because many people with HIV/AIDS are low income—or become low income—and disabled, Medicaid is an important source of coverage. In FY 2002, Medicaid spending on AIDS care totaled $7.7 billion, including $4.2 billion in federal dollars and $3.5 billion in state funds (see Figure 3-3). Overall, the program is estimated to cover approximately 44 percent of people with HIV and 55 percent of those living with AIDS (CMS, 2002). Medicaid is also estimated to cover the health care costs of up to 90 percent of children with AIDS (CMS, 2002).3 Among those recently diagnosed with HIV (for whom coverage data were available), more than one-fifth (22 percent) were already covered by Medicaid at the time of diagnosis (Kates et al., 2002).


To be eligible for Medicaid, a person must meet the categorical and financial eligibility criteria in his or her state’s Medicaid program. Most


Horizontal equity problems (across states) exist under the Medicaid program. Some federal policies have attempted to deal with this problem. Federal minimum-income eligibility thresholds for children in all states, for example, have increased interstate equity. However, some variation in eligibility criteria persist because some states exceed minimum standards while others do not (Pernice et al., 2001).


Data on federal spending on HIV/AIDS are actuarial estimates developed by CMS.

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