Legislature(2011 - 2012)
2012-09-25 Senate Journal
Full Journal pdf2012-09-25 Senate Journal Page 2495 SB 74 Message dated June 12 was received stating: Dear President Stevens: Under the authority of Article II, Section 17, of the Alaska Constitution, I have let the following bill become law without signature: HOUSE CS FOR SENATE BILL NO. 74(RLS) am H "An Act requiring insurance coverage for autism spectrum disorders, describing the method for establishing a covered treatment plan for those disorders, and defining the covered treatment for those disorders; establishing the Comprehensive Autism Early Diagnosis and Treatment Task Force; and providing for an effective date." Chapter No. 63, SLA 2012 [Effective Date: See Chapter] Autism spectrum disorders (ASD) are far too common, and these disorders pose significant health and economic challenges for those with ASD and their family members. Additionally, if not diagnosed and treated from an early age, ASD place a significant financial burden on the State for education, medical, and other personal costs. In Alaska, when insurance companies offer health care policies for sale, they are currently required to provide coverage for about 15 procedures and conditions, including mammograms and treatment for diabetes. Statutory coverage requirements for insurance products are designed to avoid costs and suffering that can otherwise be avoided. This legislation exempts approximately 20,000 small Alaska businesses from its impacts, and that is where the complexity begins. For while the legislation exempted many of Alaska's small businesses, the legislation does require insurance companies to provide ASD 2012-09-25 Senate Journal Page 2496 coverage in health care policies purchased by larger employers in the private market. In that context, most of the legislative committee testimony and record focused on the estimated costs and benefits of requiring coverage for autism spectrum disorders. No independent, peer reviewed actuarial analysis of SB 74 was conducted. However, estimated premium cost increases ranged from 0.1 percent to three percent, depending on coverage definitions and assumptions used. The only objective, peer-reviewed study related to costs of this new policy was conducted by Oliver Wyman, an actuary. Wyman concluded the estimated increase in premium (in California) for requiring ASD coverage would range from 0.1 percent to 0.75 1 percent in the first five years. Perhaps even more persuasively, the Wyman study discussed the long term benefits of early diagnosis, intervention, and treatment of ASD. It noted an oft-cited report saying that the incremental societal cost of autism is $3.2 million per capita in 2 2003 dollars. Additionally, the Wyman study found: Based on the results of several studies, we expect that the costs of ABA [Applied Behavioral Analysis] treatments covered under Assembly Bill 171 could be recovered through reductions in educational and medical expenditures alone. 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. [emphasis added] -------------------------------------------------------------- 1 Oliver Wyman, Actuarial Cost Estimate: California Assembly Bill 171, p. 18. February 8, 2011. 2 Id. At 19 (citing Ganz, Michael L. The Lifetime Distribution of the Incremental Societal Costs of Autism. Archives of Pediatrics & Adolescent Medicine. April 2007. Volume 161). 2012-09-25 Senate Journal Page 2497 Those findings were supported in the Alaska legislative committee record where in the special education arena alone, insurance coverage for ASD will save the State an estimated $208,500 per capita in avoided special education costs with a lifetime savings of $1.8 million per capita. Opponents of SB 74 testified that premium costs could go up by three percent annually, but they made the assertion without detailed analysis or justification for that number. Moreover, the legislation's opponents failed to present any analysis debunking the proponents' arguments of societal cost savings under the legislation. In the future, I will remain open to amending this law upon more compelling evidence that the proponents' assumptions were misplaced. However, without substantiated evidence on the record to the contrary, I defer to the weight of testimony and analysis, as well as the Legislature's judgment, to conclude that the long-term cost savings of discovering and intervening in ASD early in a person's life justify letting this legislation become law. Research has given these families much hope because the disorder, while not curable, is treatable; many children can make significant progress by early intervention with essential services. This will likely diminish the education costs, medical costs, and increase lifelong productivity of many individuals, including family members, all interests beneficial to the State. Few today would dispute that mandatory coverage in Alaska for mammograms has staved off suffering and societal costs. The same argument has won the day here for ASD. For these reasons, I have allowed HCS SB 74 (RLS) am H to become law without my signature. Sincerely, /s/ Sean Parnell Governor