Recent HIV treatment breakthroughs have lowered HIV mortality in the United States, but have also coincided with increased HIV incidence. The authors argue that these trends are causally linked, because new treatments have improved health and survival for the HIV+, increased their sexual activity, and thus facilitated HIV's spread. Using variation in state-level Medicaid eligibility rules as an instrument for HIV treatment, we find that treating HIV+ individuals more than doubles their number of sex partners. A change of this magnitude would increase infection risk by at least 44 percent for the HIV-negative and likely have lowered their expected welfare.
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