services, and some engage in fund-raising from the individuals and businesses in their community.

The following discussion presents a brief description of the major sources of federal funding reaching the community. A number of smaller funding sources are scattered throughout federal agencies in the form of grants to the providers discussed in the previous section or in the form of demonstration grants.


Medicaid (Title XIX of the Social Security Act), the second largest publicly financed health care program, provided health and long-term care coverage to approximately 36.8 million Americans in 1996—the elderly, the disabled, women, and children (DHHS, 1998). Over 61.5% of women in care for HIV are insured by Medicaid (Rand, 1998). Medicaid also pays for the care of about 90% of children with AIDS (DHHS, 1998). Medicaid is the largest single payer of direct medical services for people with AIDS, totaling approximately $3.5 billion in FY 1998 (DHHS, 1998).

Medicaid is an entitlement that guarantees eligible individuals access to a minimum level of benefits, established by the federal government, regardless of where they live, but individuals must meet state income and resource criteria and fall within specific categories. States have the option, however, of adding eligibles and services to their Medicaid program from a federally established list and still receiving a federal match. Thirty-four states offer a "medically needy" option that permits those with too much income to otherwise qualify by offsetting their excess income with medical or remedial expenses. Medicaid covers only 62% of the poor, and since the 1996 legislation, coverage for legal immigrants, children with disabilities, and individuals with substance abuse and alcoholism has been either eliminated or restricted (AIDS Action Council, 1998b). In most states, persons eligible for SSI disability benefits are automatically eligible for Medicaid.

States share the cost of the program with the federal government, paying between 20% and 50% of the cost. The full range of Medicaid services identified in a state plan must be provided to persons with HIV disease. Some states offer optional services, such as targeted case management, preventive services, and hospice care. Medicaid currently covers all Food and Drug Administration (FDA) approved prescribed drugs, including those used for prophylactic treatment of AIDS-related opportunistic infections, and drugs for treatment of HIV disease and prevention of perinatal HIV transmission. Although states are required to cover these drugs for people on Medicaid and can participate in Medicaid's drug rebate contract, many states have imposed limitations by restricting the number of prescriptions a patient can purchase in a month, the number and terms of refills, a requirement for prior authorization, and a determination of "medical necessity." Medicaid has issued a directive to states requiring that those which include drugs and cover the HIV population in managed care, and to ensure that

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