The Minnesota House Commerce and Consumer Protection Finance
and Policy Committee passed HF.181,
which is legislation
that would require insurance companies to cover behavioral therapy for children
with Autism Spectrum Disorder (ASD), and referred it to the Health and
Human Services Finance committee. ASD is a mental health disorder that affects approximately
1 in 88 children in
the United States, and the prevalence has increased rapidly over the past two
decades. (Look
here for a quick overview of ASD). To date, 31 states have passed
legislation that prevents health insurance companies from excluding coverage
for Early Intensive Behavioral Intervention (EIBI) and other necessary
treatments for children with ASD.
This is an important issue both for families who have
children with ASD and for Minnesota as a whole. Although appropriate treatment
plans vary by child, early identification and intensive behavioral therapies are
the most effective known treatments. Beginning with a landmark study by Lovaas
in 1987, many researchers have found that, when implemented early in a child’s
life, they help as many as 50% of children with ASD achieve a normal IQ and
ability to participate in general education settings, obtain jobs, and lead
relatively independent lives. Another 40% of children who receive therapy show
significant improvement and require less intensive services and supports later
in life.
Some insurers do currently provide coverage for behavioral
therapy related to ASD, however many families in Minnesota who have private
insurance are denied coverage for their children’s mental health treatment
after they receive a diagnosis of ASD. This often shifts the burden of paying
for therapy, which costs an average of $40,000 per year for 3 to 6 year olds1,
to state and county governments in the form of increased use of medical
assistance programs, and to families in the form of payment for uncovered
services.
States also pay for special education services for children
with autism. During the 2011-12 school year, approximately 12% of children
receiving special education services were receiving services for autism2,
and the estimated cost of special education services is between $15,000 and
$30,0003 per student depending on the severity. Beyond age 22 when
individuals age out of the public education system, they may need adult care
services, and when families are unable to pay, governments often have to
intervene. Adult care services cost an estimated $826,2794 per
person.
Early intervention can considerably reduce reliance on
special education and other costs later in life for individuals with autism.
One study found that providing three years of EIBI for a child with autism from
ages 3 to 6 would save the state of Texas an estimated $208,500 in special
education costs over the next 18 years5 through reduction in the
number of children requiring services and lower intensity of services required
by children who continue to need services.
Aside from the moral basis for providing early intervention
to improve later outcomes, cost savings realized through investing in these
treatments for children with ASD makes the necessity of access to these
treatments clear. The remaining question is: Who pays? States can realize
benefits whether they provide services directly, or require insurance companies
to pay for treatment, but whether states should
have to pay for treatment when individuals have private insurance is another
question. Coverage for behavioral treatments for children with autism has large
intrinsic externalities, but that’s a poor argument for allowing discriminatory
practices.
One of the reasons the insurance industry is heavily regulated
is because of acts of bad faith by insurers. In the case of treatment for
autism, individuals pay for coverage, and whether a policy covers behavioral
therapy for children with autism isn’t generally something people consider when
purchasing a health insurance policy when they do not have a child with autism.
Imperfect information, high transaction costs, imperfect and an imbalance of
power lead to market failure, which makes government intervention appropriate.
1 Derived from a cost estimate in: Ganz,
M. L. (2007). The lifetime distribution of the incremental societal costs of
autism. Archives of Pediatrics Adolescent Medicine, 161(4), 343. doi:
10.1001/archpedi.161.4.343. The estimated of behavioral therapy costs from
age 3 to 22 was adjusted from 2003 to 2012 dollars using the CPI.
3 From The
Cost of Autism: Technical Appendix by Michael L. Ganz (2008).
4 Derived using Ganz’s (2007) cost estimate for
adult care costs between ages 3 and 22, also adjusted to 2012 dollars.
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