Legislature(2011 - 2012)

2012-09-25 Senate Journal

Full Journal pdf

2012-09-25                     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                                                                  
         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                                                                 
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                                                      
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]                                                                                               
  Oliver Wyman, Actuarial Cost Estimate: California Assembly Bill 171,                                                          
p. 18. February 8, 2011.                                                                                                        
  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.                                                                
Sean Parnell