Medicare's HIV care costs projected to nearly triple by 2035, study shows

A growing share of Americans living with HIV are reaching retirement age, and a new modeling study in JAMA Network Open shows what that shift will mean for Medicare's budget over the decade.

The study, ‘Ten-Year Cost Projections for Medicare Beneficiaries 65 Years or Older With HIV,’ was led by Emily P. Hyle, M.D., a Boston-based infectious disease physician at Mass General Brigham and associate professor at Harvard Medical School. The findings point to a rapidly expanding patient population and a cost curve driven almost entirely by one factor: the price of the medications that keep the virus suppressed.

Hyle and her team built their projections using a validated HIV cost-effectiveness model known as CEPAC-US, adapted for this analysis as the CHARMED model, to simulate the population of Medicare beneficiaries 65 and older receiving HIV care between 2026 and 2035. The model incorporated current antiretroviral therapy (ART) prescribing patterns and healthcare-related inflation, then validated its outputs against CDC surveillance data.

The study estimates that roughly 121,890 Medicare beneficiaries 65 and older will be receiving HIV care at the end of 2026. That number is expected to climb to approximately 193,560 by the end of 2035. The oldest beneficiaries will see the sharpest increase in spending, with the population of HIV-positive Medicare enrollees age 80 and up projected to nearly triple over the decade.

ART drives the bulk of spending

That growth translates directly into spending. Total Medicare costs tied to this population are projected to rise from $10.9 billion in 2026 to $27.3 billion in 2035, adding up to a cumulative $187.2 billion over the 10-year window.

Annual spending on ART alone for beneficiaries 65 and older is projected to nearly triple, climbing from $6.4 billion in 2026 to $17.8 billion by 2035.

Possible paths to lower costs

The study also tested what would happen under different cost-reduction scenarios. If ART prices fell by 60% across the board, the researchers estimated Medicare could save $70.3 billion over the decade. More realistically, two changes already in motion, Medicare's new authority to negotiate drug prices under the Inflation Reduction Act (which applies to the HIV drug Biktarvy) and the expected 2031 launch of a generic version of dolutegravir, a commonly used HIV medication, are together projected to save Medicare about $19.4 billion.

A funding tradeoff to watch

Lower drug prices for Medicare could carry an unintended cost. Many HIV clinics and community health organizations rely heavily on the 340B Drug Pricing Program, which allows them to purchase medications at deep discounts while billing insurers, including Medicare, at full price. Providers keep the margin and often use it to fund services for patients without insurance.

“Current estimates suggest that 340B revenue from ART cost reductions may decrease by 45% to 50% through reduced reimbursement due to the IRA; similar reductions would likely occur with a switch to generic ART,” Hyle and her team write in the study. “Although there is mixed evidence on the impact of the 340B program in increasing care access, ART cost reductions would lead to substantially lower reimbursement, which could necessitate alternative funding, such as increased federal grants, to ensure that older people with HIV continue to receive the care they need.”