Law to provide HIV care stalled

A widely touted law that was supposed to provide medical care for poor, uninsured Californians infected with HIV has yet to be put into practice by Gov. Arnold Schwarzenegger’s administration, leaving thousands without the health coverage lawmakers promised more than four years ago.

The 2003 law was endorsed by newspapers across the state and championed by activists as the most significant piece of AIDS-related legislation in a decade. It was designed to allow low-income, uninsured people with HIV -- but not full-blown AIDS -- to get medical care through the state’s Medi-Cal program, as they can now do after their illness fully develops.

But the program has been stillborn, with state officials saying that the law’s constraints made it impossible to implement, and AIDS activists arguing that the administration’s efforts have been half-hearted.

Passed by the Democratic-led Legislature and signed by then-Gov. Gray Davis in the midst of his successful 2002 re-election campaign, the law contained an appealing proviso at a time when the state was running a giant deficit: it promised to cost taxpayers nothing.

That pledge has turned out to be part of the law’s undoing.

Healthcare for HIV patients was to be paid for by savings from AIDS patients voluntarily moving from expensive fee-for-service treatment to more cost-effective managed care. But the state Department of Health Services says that of the 18,000 Medi-Cal recipients with AIDS, only 200 have agreed to switch.

“It’s really regretful we’ve not been able to demonstrate budget neutrality,” said Stan Rosenstein, deputy director of medical care services in the state Department of Health Services.

“We’ve tried to outreach to people, we’ve sent notices. It’s a choice people make.”

But AIDS activists blame the department for not making a greater effort. About 8,000 people with HIV in California would qualify for Medi-Cal coverage if the program were launched, according to state estimates.

The law’s sponsor, the Los-Angeles-based AIDS Healthcare Foundation, said it planned to file a lawsuit today to compel the state to start providing coverage for poor, uninsured HIV patients.

“It’s not optional which laws to implement,” said Michael Weinstein, the foundation president. “It’s just a turgid bureaucracy and they don’t know how to do this, or they haven’t been interested in doing this.”

Though the legislation was signed a year before Schwarzenegger was elected, it shares many of the precepts at the center of the governor’s current push for universal healthcare, his signature policy issue this year.

Schwarzenegger has focused on confronting nascent illnesses before they become more costly disorders. He also favors expanding managed care in Medi-Cal to help control costs.

Both ideas were at the heart of the 2003 law. Supporters argued that it would be cheaper to treat people with HIV than to wait until the disease morphed into far more serious AIDS, when they would qualify as disabled and therefore be eligible for Medi-Cal, which is California’s heathcare program for the poor.

“It just seemed like a win-win and a logical approach, but it has not been implemented by this administration for whatever reason,” said Paul Koretz, a West Hollywood Democrat who sponsored the bill when he was in the state Assembly.

However, Democratic lawmakers’ aversion to managed care may also have contributed to the program’s lack of success. They have often opposed efforts to force disabled patients into Medi-Cal managed care programs. Koretz’s law specified that the transition of an AIDS patient to managed care from fee-for-service treatment could be done only voluntarily.

The stipulation that the program’s costs be offset was required by the federal government, and the law said that the state could not launch the program until it had shown how it would do that. Lawmakers and advocates expected that the state would start enrolling people with HIV as the money became available.

They anticipated that the program would not be prohibitively expensive because the cost of medications--one of the main health needs for people with HIV--would be borne by an existing program, so Medi-Cal would only have to pay for testing and physician care for illnesses caused by HIV, such as diabetes and high cholesterol.

But the health departments’ fiscal forecasts were gloomy. The state initially estimated that it would be able to pay for the healthcare of one person with HIV with the savings from 20 people with AIDS moving into managed care.

Since then, increased reimbursement rates to Medi-Cal managed care providers -- including, ironically, the AIDS Healthcare Foundation, which is a state Medi-Cal contractor -- have made the savings even slimmer. The state now estimates that it would take 100 people transitioning to managed care to save enough money to treat one person with HIV -- a figure that AIDS advocates say is greatly exaggerated.

Rosenstein said the state sends notices every year to those with AIDS enrolled in Medi-Cal informing them of the option to switch. But he said state and federal laws bar California from advertising the benefits of switching or offering patients any enticements, and until California is able to demonstrate greater savings, it has stopped pursuing federal approval for the program.

Rosenstein said no state has succeeded in making similar programs cost-free, although Maine and Vermont tried. He said Massachusetts does give care for HIV people, but it is paid for by savings elsewhere in the state system.

Recently, the appeal for patients to switch has waned because the Schwarzenegger administration is now focused on improving its Medi-Cal fee-for-service program for people with AIDS in hopes of achieving savings, according to Rosenstein. Dr. Marcus A. Conant, chairman of the Conant Foundation, a San Francisco foundation that focuses on AIDS education, said many may be wary of abandoning the personal relationship they have forged with their physicians.

“Medi-Cal patients who have found a good doc who really knows something about the disease may well want to stay with their doc rather than take their chances going into a managed care program,” Conant said.

Without Med-Cal, poor people with HIV and no insurance are forced to find other ways to get care or do without. Vernon Smith, a 64-year-old former caterer who lives in Crenshaw Manor, says he goes to a free clinic in West Hollywood.

He applied for Medi-Cal, but, he said, “I wasn’t ill enough.” He is looking forward to his birthday in a few months, when he will qualify for Medicare, the federal program for the elderly.

Weinstein questioned whether Schwarzenegger’s ambitious plan to overhaul the state’s entire healthcare system could succeed if his administration could not deal with this narrow issue.

“How are you going to generate savings in another area,” Weinstein asked, “if you can’t do it in a high-cost area like AIDS?”

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jordan.rau@latimes.com