Actuarial Study: Taxpayer Savings From Michigan Autism Insurance Bills Could Offest Increase in Premiums
NEW YORK, NY (October 12, 2011) An actuarial study commissioned by Autism Speaks concludes that a pair of autism insurance reform bills before the Michigan legislature could reduce the need for taxpayer-funded special education and medical programs, offsetting an estimated 0.36 percent impact on premiums.
Conducted by Oliver Wyman Actuarial Consulting, Inc., a part of the Marsh & McLennan family of companies, the report has been presented to Michigan lawmakers who are considering a pair of bipartisan bills, SB.414, sponsored by Senator Mike Green (R-Mayville), and SB.415, sponsored by Senator Tupac Hunter (D-Detroit), that would require insurers to cover behavioral therapies, such as applied behavior analysis (ABA.)
Since the bills were endorsed by Governor Rick Snyder last month, a 28th state California - has enacted autism insurance reform, leaving Michigan in the shrinking minority of states which have yet to end industry discrimination against families caring for loved ones with autism spectrum disorders (ASDs.) Indiana, Illinois and Wisconsin have all enacted such laws.
Based on the results of several studies, we expect that the costs of ABA treatments covered under SB 414 & 415 could be recovered through reductions in educational and medical expenditures alone, the Wyman study concluded. We also expect that benefits associated with successful treatments would reduce future costs of caring for individuals with ASD, and improve both the productivity and the quality of life for individuals with ASD, as well as their family caregivers.
In contrast to the 1 to 3 percent impact on premiums cited by opponents of the bills, the Wyman study found that the long-term cost of covering behavioral treatments, such as ABA, would impact premiums by about 0.36 percent, roughly the cost of buying a cup of Dunkin Donuts coffee once a month, said Peter Bell, Autism Speaks executive vice president for programs and services.
The Michigan estimate is consistent with actual experience in other states which have enacted autism insurance reform where the real-life impact has been less than 1 percent. The inflated 1 to 3 percent estimate, meanwhile, is consistent with the scare tactics used by insurance industry lobbyists without success in 28 other state capitols.
As noted by Los Angeles Times columnist David Lazarus, the California Association of Health Plans in its unsuccessful veto campaign last week with Gov. Jerry Brown floated an $850 million cost estimate; the California Health Benefits Review Program, in an estimate for the California legislature, pegged the cost closer to $93 million for the states more than 37 million residents.
Early intervention behavioral treatments have been proven repeatedly to improve the functioning and independence of children with autism before they enter school, thereby reducing the need down the road for taxpayer-funded special education and medical costs.
In particular, a 2006 study showed that children with ASDs who were provided early intervention improved their IQ by 25 points and that 29 percent attended mainstream classes without any need for support and another 52 percent entered mainstream classes with support. Children with ASDs who were not provided early intervention demonstrated a 14 point growth in IQ and only 5 percent entered mainstream classes.
Michigan families caring for loved ones with autism currently pay insurance companies thousands of dollars a year in premiums yet are denied any benefits in return for behavioral therapies.
In the absence of coverage, families often pay as much as they can out-of-pocket for services that can cost upwards of $50,000 per year, said Bell. In the process, many risk their homes and the educations of their unaffected children essentially mortgaging their entire futures. A majority of states recognize that such medical costs are out of the reach of families and properly handled by medical insurance. It is the only way to spread the risk over large insurance pools.
The Michigan Chamber of Commerce has offered a common sense compromise suggesting those families absorb the full cost of autism benefits, yet fails to quantify what those costs would be under its proposal. The Chamber has also labeled the bills a job killer, ignoring the thousands of potential jobs that could be created for behavioral therapists as a result of improved access, as well as the loss of quality workers who flee Michigan for jobs in the 28 states that do offer insurance coverage.
In Florida, which requires coverage of behavioral therapies, the state has 1,800 Board Certified Behavioral Therapists. Michigan has 60.