One of the biggest ways the Virginia Department of Health has fought the HIV epidemic in the state has been by buying insurance on the Affordable Healthcare Marketplace.
A combination of ACA premium tax credits, drug company rebates and federal funding made purchasing insurance and paying premiums, deductibles and copayments for people with low incomes living with HIV far cheaper than buying antiretroviral medications they need daily.
“By purchasing marketplace plan insurance, we’re able to cover two clients’ premiums at the same cost it would be to provide [HIV] medication for one client,” said Dr. Karen Shelton, who recently served as a VDH commissioner under former Gov. Glenn Youngkin. “Plus, they have the added benefit of comprehensive healthcare.”
People living with HIV have chronic inflammation because their immune systems work harder to suppress the virus. Inflammation contributes to high rates of heart disease, stroke and diabetes in this population, said Emily Blaiklock, a Georgia pharmacist and member of the national advocacy group Ryan White Clinics for 340B Access.
“That is really important for people to realize in this current political environment, where we're talking about reducing access to Medicaid and reducing subsidies for insurance plans,” Blaiklock said.
But crushing financial pressures — including the end of COVID-era tax credits that subsidized insurance on the marketplace — now threaten healthcare for thousands of Virginians with HIV.
“The sunset of premium tax credits, a projected 15-20% increase in marketplace insurance premiums and anticipated increases in drug prices, will impact the Virginia [HIV] Medication Assistance Program, and potentially, its ability to purchase insurance,” VDH wrote in an email to WHRO.
As the state has scrambled to manage the price jumps, it’s slashed support for other HIV programs, including funding for clinics across the state.
VDH cut the largest source of funding for Ryan White program clinics, which provide essential medical and support services to Virginians with low incomes living with HIV, by more than 67%.
Experts warn these cuts will have serious impacts on those living with HIV and longstanding efforts to prevent the virus’ spread. In Hampton Roads, people who test positive for HIV are seeing longer wait times to receive treatment, said Stacie Walls, CEO of the LGBT Life Center.
Timely access to medication helps prevent new infections and improves health outcomes. But the LGBT Life Center has been unable to immediately start treatment after testing since losing its state medical grant.
“It is systematically dismantling public health systems in Virginia that will take years to rebuild,” Walls said.
VDH’s backup plans
State health departments across the country use ACA marketplace coverage to provide medications for AIDS Drug Assistance Programs (ADAPs), part of the federal Ryan White HIV/AIDS Fund administered by states. That program pays for HIV treatment and services for uninsured and underinsured people with low incomes living with HIV.
ADAPs earn rebates from pharmaceutical companies for medication payments, made with ADAP-sponsored ACA or employer-based insurance.
State health departments use those rebates to fund the bulk of insurance payments and other Ryan White services, including clinics. “The program’s provision of insurance coverage is only cost-effective with rebates,” VDH wrote.
As ACA costs soar, Virginia was hit by a $17 million decrease in 2024 in pharmaceutical rebates used to purchase insurance, medications and to fund clinics — down from $33 million received in 2022 and 2023, VDH said. In 2025, VDH received more than $23 million in rebates.
About 40% of people living with HIV in the U.S. receive insurance through Medicaid. But the ACA marketplace insurance paid for by ADAPs is an important safety net, said Tim Horn, with NASTAD, an organization that mediates drug cost agreements between states and companies.
“Medicaid expansion has been the biggest contributor to improved health coverage rates among people with HIV,” Horn said. “Nevertheless, the ACA has also ushered in vast improvements in private insurance coverage options for people with HIV, notably those who are not eligible for Medicaid.”
Without the premium tax credits, ACA marketplace insurance costs will skyrocket for ADAPs nationwide.
In 2025, the premium costs for an ADAP client with an income of 200% of the federal poverty level, who was 40 years of age and a non-smoker, were roughly $50 a month, Horn said.
“Go to 2026, and that rate becomes $172 — a 242% increase for that individual,” Horn said.
Those spiking costs and fewer funds mean it will be harder for the state to afford lifesaving HIV medications for the more than 4,500 people served by the Virginia ADAP, VDH said.
The agency is federally mandated to prioritize providing HIV medications over other key medical services that fall under the Ryan White program. VDH has primarily used insurance coverage to ensure medication access, but also buys HIV medications directly from drug companies at a discount for people not covered by ACA plans or other insurance.
VDH wouldn’t provide WHRO with figures showing how rebates and discounts offset insurance and drug costs, because the agency said its rate-setting agreements with drug companies are confidential.
But an annual report on Virginia ADAP spending shows that as of March 31, 2023, the average monthly cost of premiums and medication for one person with ACA coverage, with rebates, was $617, while purchasing medication directly for one person cost VDH $1,178 a month.
As of March 31, 2023, 31% of Virginia ADAP clients had ACA marketplace insurance.
To continue insurance and medication payments for 2026, VDH made painful cuts last year to other health initiatives combating the HIV epidemic in Virginia.
VDH reduced rebates and federal grant dollars dedicated to Ryan White clinics, from $29 million in 2024 to $9.7 million last year.
“Because the amount of rebates available in grant year 2025 is significantly lower, there were fewer resources overall for the [Ryan White] program,” VDH wrote.
“Restricting the [Ryan White clinic] funding enabled the program to use available resources to prioritize ADAP services,” VDH continued.
The number of clinics funded dropped from 29 to 14, with cuts happening across the state, leading providers to rely more heavily on limited local funding and smaller grants.
Ryan White clinics are proven to be more effective at managing HIV than other treatment models. Patients who receive care at Ryan White clinics have a viral suppression rate — meaning HIV is undetectable — of nearly 91%. The viral suppression rate for the general population of people living with HIV in the U.S. is far lower at 65%.
Ryan White clinics are successful because they offer one-stop care, Blaiklock said.
“We don’t want to say, come here for your HIV care, go to this doctor down the street for your diabetes care, go to this doctor two towns over for your blood pressure maintenance,” she said.
Virginia’s cuts mean that Ryan White clinics are unable to offer holistic care — substance abuse and mental health treatment, housing assistance and other services — which public health experts say is crucial to supporting adherence to HIV treatment.
Scale of rebate losses unclear
VDH said that the sharp dip in drug rebates was “unexpected.” And it’s not clear why it happened, considering how rebates are generated.
ADAPs rely heavily on rebates to pay for medications, as annual federal Ryan White program funds remain flat.
In 2023, about half of the total budget for all ADAPs nationwide came from pharmaceutical rebates, while about 31% came from federal funds.
In 2024, VDH received $17.9 million in federal funds for ADAP services, and nearly $8.1 million for Ryan White clinics and other support services — a total federal grant of $25.9 million.
VDH has received close to the same amount of federal funding for Ryan White program treatment services over the previous few years.
VDH wrote that rebates have declined because of “fewer clients enrolled in insurance, changes in manufacturer terms, and other industry changes.”
But ADAP annual reports show that private insurance enrollment for Virginia ADAP clients has been increasing slightly over the last several years — from 1,097 in 2022 to 2,648 in 2025.
A NASTAD analysis of national data from 2019 to 2024 from 17 states indicates that the number of ADAP clients with insurance isn’t declining nationally.
“I would argue that the number of clients in these programs has remained relatively stable nationwide,” Horn said.
It’s also unclear how changes in drug manufacturer terms would decrease rebates.
Rebates are determined by the 340B program formula, a federal model for determining price limits on drugs purchased by programs that provide indigent care, such as ADAPs.
The 340B program formula works to prevent sudden increases or decreases in drug prices, which determines rebates and drug company revenue, Blaiklock said. States can also negotiate additional, deeper discounts through NASTAD. The 340B formula makes big year-to-year shifts in rebate revenue less likely.
“If manufacturers raise their prices faster than inflation, there's a 340B penalty — they could have to offer their drug to 340B covered entities for a penny,” Blaiklock said.
Conversely, if manufacturers keep prices low, then the rebates they have to give under 340B are smaller. But the sting of lower rebates for ADAPs tends to be offset by lower medication costs, she said.
The advantage for pharmaceutical companies of providing rebates and discounts for ADAPs is gaining a competitive market share of the large and sustainable patient population served by ADAPs, public health experts say.
VDH considers buying less insurance
VDH plans to continue purchasing ACA coverage for ADAP clients for 2026, as early data shows it is still cost effective, but will most likely only approve lower tier, bronze and silver level ACA plans.
But ADAPs will face bigger challenges to affordability in the next few years. The overall cost of insurance is expected to balloon due to healthcare inflation, rising drug costs and other factors, public health advocates say.
Ryan White programs are also strained by federal cuts to Medicaid that threaten insurance coverage for people with low incomes living with HIV. Patients newly disenrolled from Medicaid would depend on Ryan White programs to fill coverage gaps.
Medicaid expansion and ACA coverage work together to prevent long waits to access HIV medications, public health experts say. People who qualify for Medicaid are routinely transferred from Virginia ADAP services rolls, leaving more ADAP funds to help people who struggle to afford medication, but don’t meet the threshold for Medicaid.
Curtailing Medicaid expansion and ADAP funding, as well as phasing out any tax credits on ACA premiums, threatens HIV medication access, Horn said.
“We had an ADAP enrollment waitlist in the early aughts, in the 2010s,” Horn said, “And to be blunt, if ADAPs cannot afford comprehensive private insurance for their clients, we really will be in serious jeopardy of returning to those very scary and difficult times.”