The Costs of Treating AIDS under Medicaid

AIDS (Acquired Immune Deficiency Syndrome) ranks near the top of the list of major impairments in terms of average lifetime medical costs. A large share of the rapidly escalating costs for treating victims of the AIDS epidemic will fall on the Medicaid program. This Note reports the results of a five-month exploratory research effort that attempted to estimate these costs. The findings are only best estimates, given current knowledge. Combining assumptions as to case load, Medicaid eligibility, average treatment costs, and Medicaid reimbursement rates yields a range of estimate for cumulative Medicaid costs in 1986-1991. The intermediate estimate amounts to about $10 billion, although the most optimistic set of assumptions would yield an estimate as low as $2 billion, and the most pessimistic would produce an estimate as high as $47 billion. National total treatment costs are also estimated.