The Financial Fallout of HIV: Update from the Trenches

Managing your money while living longer
by Per Larson

In the 20th Century, HIV was seen as a one-way street to all the “d-words”: disease, disability, and death. This emboldened viatical settlement companies to buy life insurance policies from people with HIV at prices near 90% of their face value. Low T-cells alone assured social security disability approval. People bought credit card, life, and disability insur­ance. Investment was shunned or used like a last-chance, all-or-nothing game. The will became the legal document of the day in order to safeguard interests after death.

In the new millennium, however, HIV has become a two-way street. Disability can now be a refuge from downsizing companies, a chance to re-skill and redirect one’s life. Viatical settlement has been shoved aside by accelerated payouts of life benefits. Disability is still granted, but now, often on the basis of medication side effects or the increasing number of HIV-related conditions that can occur. Bankruptcy laws have been tightened. Investment and retirement are new concerns. And the legal doc­ument of the day is the living trust and powers of attorney in order to safe­guard interests during life.

All these shifts have left people with HIV with many no-longer-relevant and possibly dan­gerous ideas about personal finances formed during the horrors of the 80s and 90s. It’s increasingly obvious that the widely published advice in money magazines is misleading and can be downright dangerous when HIV is in the picture. I wrote the book, Gay Money, because traditional financial advice is geared to people who are heterosexual, married with 2.5 children, suburban, and employed. We need to pick our way among the land mines and oppor­tunities generated by all this.

Dwindling Medical Insurance

The HMO-ization of America is now complete. To my credit, though I was trained at the Wharton School as an HMO director in 1976, I saw then what we are all experiencing now: the only way HMOs know how to cut costs is to cut service and pass on costs to the patients.

As insurers find themselves with their backs to the wall in the current meltdown, they’ve become even more motivated to recoup their high costs on the backs of consumers, not providers. Deductibles have increased and co-payments have skyrocketed, especially for the brand-name drugs HIV requires.

In the 90s, Medicaid and Medicare paid better—and we’re all paying the price for that now. Since most people with HIV are the working sick, the ben­efits tail must wag the employment dog: secure bene­fits may be more important than high salary or satis­fying jobs. Employers are going bankrupt. Singles are being targeted in employer reorganizations and downsizings. The AIDS Drug Assistance Program (ADAP) is under the gun. HIV medical practices are closing down. Out-of-pocket costs for treatment are rising. Any policy with a dollar maximum—even $1 million policies (and far less on medical policies converted from COBRA coverage)—is being hit hard. Monitoring this environment carefully is key.

Retiree benefits are also under attack. Pension funds are imploding, while 401K funds turned out to be the sickest joke yet invented by employers. The Social Security Administration has no Cost of Living Allowance (COLA) now. Medicare Part B premiums are doubled and, once on Medicare, you cannot purchase individual medical insurance. This can force middle-class people to impov­erish themselves to qualify for Medicaid, adding financial insult to medical injury.

For people with HIV in a few states (New York, New Jersey, Massachusetts), there are still often three key protections: individual insurance is priced the same for everyone (communi­ty rating); continuity of coverage enables people not eligible for Medicare to go from one health plan to another; and people can often keep individual medical insurance to pay for pharmaceuticals, even when going onto Medicare because of disability. For people with HIV in states that have risk pool insurance (about half the country), there may be plans that even take people who are already on Medicare. The regulations are complex; the prices vary considerably; but it’s well worth it when it works.

In this era of bad
financial advice, the worst advice ever given to anyone with HIV may be to give away assets and go onto Medicaid.
Preserving private medical insurance benefits is key to preserving financial security. But only a few states have ADAP provisions that even pay insur­ance premiums for those with incomes up to $44,500/year and assets under $25,000. In New York, the AIDS Housing and Information Project (AHIP) has a lower income limit of under about $15,000 a year, but it has no asset limit. Get on these programs now to be “grandfathered” (i.e., remain included) later when the real crunch comes! Moving to a good insurance state becomes an option.

Before you move, though, be aware that in the past 10 years, due to HMO-ization, medical insurance has become geographically bound. Insurers would like nothing better than to cancel coverage for moving out of a geographic area.

As we found out in the pre-protease inhibitor era, when major illness strikes, medical insurance becomes the greatest asset; worth far more than a condominium, investment portfolio, or 401(k) retire­ment fund. Medical insurance is not a place to skimp. Especially if you have low income and/or assets, the best medical coverage is needed to withstand the onslaught of non-reimbursed expenses and payment delays.

Threatened disability benefits

Disability benefits are threatened not because people are more able to work, but because insurers had expected people with HIV to die and are now squeezed financially. Insurers already had very bad investment performance. Imagine how devastated they’ve been by the economic meltdown.

Some insurers of individuals bought carriers insuring groups because groups are regulated by the Employee Retirement Income Security Act (ERISA). ERISA prohibits triple damages and collection for attorney fees. As a result some people with HIV, whose disability benefit is with a group, have been experienc­ing the sudden cancellation of benefits, offers of pid­dling buyouts, and the scouring of their doctor’s records for any mention that the patient feels or looks good. Faced with having to sue, and lack of motivation for attorneys to take them on, many people with HIV are caving in, thus experiencing a drastic drop in income.

Lastly, HIV-positive people who still hold individual policies from the 80s should be aware that these were often tacitly designed to be underwritten (screened) at the time of a claim instead of the time they were sold. These are claim disasters waiting to happen.

Since the early 90s, the best (and only) way to get disability coverage is through employment. The good news is that insurers have introduced “portable” coverage in some states and industries. Portable disability coverage—just as portable medical coverage—means the end of “job lock”—having to hold onto a job because qualifying for coverage in a new job can take up to one year (during which you’re not covered). Portable coverage means the new group would give credit for previous experience—making job moves seamless benefit-wise. Check your local HIV legal group.

Group disability insurance can be converted to individual coverage without medical underwriting if you’re terminated. It deducts (“coordinates”) what Social Security would pay, so it only makes sense if you make $40,000/year or more. It’s expensive, but it’s better than nothing.

The implications of HIV becoming a chronic illness

The dramatic shift of HIV from terminal to chronic has not resulted in either a witch hunt of people already on claim or insurmountable barriers for people making a claim. My track record of only one denial in 800+ LTD and SSDI applications continues.

People on disability theoretically have far more time than working stiffs to upgrade skills, especially since programs like the New York State Vocational and Educational Services for Individuals with Disabilities (VESID) Program are more than ready to pay for even multiple training programs. This takes enormous self-motivation, however, which can be compromised by HIV’s fatigue and unpredictabili­ty.

Today’s work world is increasingly technological, and technology is evolving ever more rapidly. A dis­ability time-out may work to recoup health, rebuild skills, and redirect life. But, in work-obsessed America, long-term disability can become equated with becoming obsolete in the work force.

Retirement is the gaping hole now facing people with HIV. Long Term Disability income stops at age 65. Even social security payments may be lower for people with HIV, due to underfunding. New savings plans, unlike the old Roth IRAs, can be funded with unearned dis­ability income, but, while these savings may grow tax-free, they’re a far cry from pensions and tax-deferred income plans where employers match their funds.

The senior years trigger the necessity to plan for long-term care, but HIV-positive people cannot get long-term care insurance. Even if they could, the premiums are very high and the coverage unregulated. But having HIV increases the likelihood that the illnesses of later years may occur earlier and harder.

Unraveling safety net

In this era of bad financial advice, the worst advice ever given to anyone with HIV may be to give away assets and go onto Medicaid. A bad economy and the legacy of many conservative administrations have combined to cut Medicaid funding, tighten eli­gibility, and restrict federally mandated benefits. The social safety net is full of holes.

That said, there are many new ways to pay for Medicaid benefits under the Ticket To Work program—even while going back to work after having been on Social Security due to disability. The premiums are either low or waived. Warning: local SSA offices may be ill-informed about this and programs which pay Medicare Part B & D premiums. It once took me a year and a half to get a New York City SSA office to get me the information I needed to help a client.

The previous administration had even cut back that hith­erto sacred cow, Veterans Administration (VA) ben­efits. When I last wrote on these issues in 2003, the feds suspended fur­ther enrollment of non-service-connected veterans with income over the levels used by the Department of Housing and Urban Development as the upper limits for housing assistance eligibility. They felt this was jus­tified because VA health enrollment had nearly tripled prior to that, as veterans grew older and learned of the VA’s prescription drug coverage.

However, if you have a low income and served in the military, you may be eligible; if so, you should apply immediately. This is especially true if you anticipate that your income may rise in the future. Many government programs have a tradition of grandfa­thering in people who had enrolled but whose cir­cumstances improve later.

Since 2003, the combination of the funneling of federal funds into Pentagon budgets, the aging of our population, the shift of Baby Boomers from funding public benefits to starting to receive them, and, now, the economic meltdown, has had the net effect of shredding society’s safety net. Lesson: don’t count on public authorities to save you.

Another change from 2003: other illness groups are learning how the HIV community managed to gain federal and state priorities in fund­ing and programs. They are now competing fiercely for the decreased funding available. Also, the bad economy has drastically reduced philanthropic giving, whether from foundations, corporations, or individuals, and many nonprofits are literally folding up shop.

The new criteria for disability

Social Security revised its HIV criteria for disability benefits in July 2008. The expanded criteria now includes medica­tion side effects and long-term HIV-related condi­tions such as hepatitis C and its treatment; medication-related stroke and heart conditions; adult onset diabetes; lipodystrophy; peripheral neuropathy; AIDS dementia and cognitive disorders; and HIV-related depres­sion. Most people do not know that SSA has a rule prohibiting the review of any SSDI benefit where HIV is even part of the reason for disability (SSA-POMS:DI 28003.005).

The very medications which saved so many from death can have deeply disabling side effects: GI problems such as diarrhea, nausea, and cramps; profound fatigue; and sleep interruption and irregularity. Many things multiply the impact of these disabling problems.

  • These manifestations are unpredictable in their onset, duration, and severity.
  • They occur in combination.
  • Their appearance and pattern are complex, making adaptations difficult if not impossible.
  • HIV itself has similar manifestations and patterns, making diagnosis difficult.
  • So many medications are required that causality and treatment are greatly compromised.
  • Medications are so powerful today they can honestly be described as 24/7 chemotherapy.

Especially with good long-term prospects, the idea of a disability time-out may be a good short or medium-term solution. This is especially true where side effects or symptoms may have resulted in poor performance in a company that’s about to downsize, be merged, or go bankrupt. Disability benefits are a good life raft to reach a new safe work haven.

Cash from life insurance

The sale of life insurance has been replaced by the acceleration of life insurance. Simply put, HIV sales dominated the viatical market during its many scandals. Many investors got burned and most of those investors now won’t deal with a company that sells policies from people with HIV. The entire industry fled HIV to buy policies from seniors.

Clients of mine have had me check their life expectancy estimates with the firm that does 90% of this work. Universally, if the person is getting care, their life expectancy is close to normal. HIV-positive people must focus on the need to plan for many years of living with the disease financially as well as medically, socially, and psychologically.

Fortunately, many group life policies now carry a Living Benefits or Accelerated Death Benefits (ADB) clause. This permits a person with advanced HIV, who is in danger of dying, to apply for a payout of the death benefit. Insurers seem motivated to do this, since life insurance sales are down and an ADB is a sales plus—and granting ADBs demonstrates to clients that there is an alternative to viatical set­tlement. This can be a great financial advantage for a person with HIV whose condition is unstable, for all that’s required on many applications is a doctor’s signature. Many insurers check only that and don’t do their own independent medical reviews. Under those circumstances, it’s worth a try.

New benefits from relationships

Entering a committed relationship now pays: marriage, civil union, or domestic partnership. In the 90s, some HIV radicals were advocating that gay men marry lesbians. Now the options have multiplied—but anyone considering this must realize that financial complications and legal ties become very important in a relationship where benefits is one of the pillars of support. Partners seeking solace from loss and long-term loneliness need to recognize that these patchwork measures must be used carefully with pro­fessional guidance from both benefits/in­surance/financial specialists and partnership agree­ment attorneys. This is especially true in real estate unions. Search NOLO.com for its many self-help legal guides, which have specialized for nearly 20 years on unmarried relationships.

With long-term neurological impacts, HIV is ever more a disease of competency. It’s important to maintain clear lines of con­trol when it comes to the complex network of sources for financial support. It’s also important to arrange powers of attorney to provide for situations where help is needed to write checks, deal with authorities, or ensure that premi­ums are paid.

People with HIV may need to protect capital, not gamble on stocks.Those concerned about maintaining quality of life should consider not only powers of attorney, but also a living trust. A trust provides instructions and control if fami­lies contest competency. It may help protect against family will contests. It guarantees that someone competent of your own choosing is always in control, and may minimize the delays and fees of probate. Beware the cheap will! It may camouflage a lawyer looking to handle a fee-lucrative estate.

New entrepreneurship

What better way to get group disability insurance and other long-term, catch-up retirement benefits than having one’s own business? I’ve written extensively on the attractiveness of entrepreneurship for gay people and others who may face severe discrimination in their later years in employed positions. Longer-term prospects make it possible to start one’s own business and then make it successful. Not everyone is suited for such self-discipline and sacri­fice, and the failure rate of small businesses is high. Motivation and focused desire are key to success, and these are also a natural by-product of fighting serious illness. A niche business well-suited to one’s experience, skills, and passion ranks right up there among life’s securities and pleasures.

Returning to work

Sometimes, the biggest problem is leaving the hard-won security of disability and public benefits for the uncertainty surrounding work today. Most disability policies will put people back on claim within six months of going back to work, but new workplace coverage may not take effect until 12 months on the job.

People who’ve run the HIV gauntlet may not be satisfied with just a job. When you’ve looked death in the eye, you may want the meaning or enjoyment of a career. You may need a job with flexibility and security that can tolerate the ups and downs of this disease. Yet, getting a job in today’s post-dot-com world is tough, even with perfect health. Consider the following:

Unemployment is up, companies are cutting back; downsizing, which was merely fashionable, is now essential.

Youth are seen as cheap to hire and easily managed, and adaptable, with recent skills.

Long-term survivorship may be accompanied by deterioration of skills and assets.

Returning to work is too complicated a subject to cover here. However, my previous series of articles for Body Positive on returning to work shows how to assess what benefit protections are absolutely needed and where risks can be taken. The series helps readers weigh factors such as drug resistance, treatment trends, and unpre­dictability of symptom outbreaks. It also outlines how to get funding for re-skilling, how to determine new career directions, and how to trade off and balance work wants with medical needs. It spells out how to use networking, rewrite resumes, and research indus­try opportunities. Lastly, it deals with resume gaps, invasive inter­view questions, legal protections, and practical tac­tics for getting a job interview and offer and for set­tling safely into a new job.Financial advice must adapt.

As long as a decade ago, I was cautioning that many financial planning tools were inappropriate for people dealing with serious illness. For starters, 90% of financial planners may have a conflict of interest if they get their income by putting people into commission-generating investments or push their brokerage’s own funds. People with HIV may need to protect capital, not gamble on stocks. They may have better luck (and far lower costs) with non-profit mutual fund families like Vanguard and TIAA-CREF rather than brokers.

HIV in the 90s dictated a focus on how to get people on disability successfully, get cash by selling life insurance, solve cash and debt problems, and postpone tax claims. In the 90s, I had to change the way financial advice was delivered. I minimized meetings because they were expensive and draining. I found that people prefer to han­dle questions by phone. I realized that employment benefits often turned out to be more important than assets such as investments and real estate.

In the new millennium, all these changes continue to be relevant. But now we need to focus on career—our money machine—in order to stop the drain of inflation. We have to apply for grants to get new skills for possible new jobs. We have to fight dirty insurer practices to keep claims secure. We have to train doctors to understand the impact of their state­ments on disability determinations. We need to tap lawyers specialized in relationship agreements, apart­ment law, and trusts.

I’ve had to retool as a financial advisor and advo­cate for HIV-positive people over the last 10 years because they now have new concerns and challenges. Make sure your advisors and helpers have changed with the times as well.

Re-educate yourself financially. Beware general­ized pop money magazine advice. Start with a unique inventory of where you are now, both your advan­tages and your problems. Insist that whoever you rely on for advice apply guidelines geared to your unique situation. It’s well worth the trouble. 

Per Larson (Wharton Graduate, MBA 1972, postgraduate 1976) has helped more than 800 people successfully apply for and keep LTD and SSDI benefits since 1993. He’s given workshops at Friends In Deed, written a book on financial issues—Gay Money—plus many articles on coping with the financial impacts of HIV. His articles have appeared in Positively Aware, POZ, and Body Positive. He has appeared on 60 Minutes and is quoted in Forbes, Kiplinger, Worth, and the New York Times. E-mail Per at PerLarson@aol.com.

To read more about Per’s book and read his early articles on HIV finance, go to www.GayMoney.com.

You can also access articles by Per for The Body in the archive of back issues at www.TheBody.com.


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