Legislature(2011 - 2012)BELTZ 105 (TSBldg)
04/14/2011 02:00 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB164 | |
| SB74 | |
| SB119 | |
| HB188 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 74 | TELECONFERENCED | |
| + | SB 119 | TELECONFERENCED | |
| += | HB 164 | TELECONFERENCED | |
| += | HB 188 | TELECONFERENCED | |
SB 74-INS. COVERAGE: AUTISM SPECTRUM DISORDER
2:26:41 PM
CHAIR EGAN announced SB 74 to be up for consideration. He opened
public testimony.
2:26:58 PM
AMORY LELAKE, staff to Senator Ellis, sponsor of SB 74, said
this bill would help children with autism get the treatment they
need while increasing the number of autism service providers in
Alaska and lowering special education and social service costs.
Autism is a devastating disorder affecting at least 1 in 110
American children and despite being treatable, most children
diagnosed with autism spectrum disorders (ASD) don't receive the
treatment they need.
SB 74 would require insurance coverage for ASDs including
evidence-based medically necessary applied behavior analysis
(ABA) that have shown to be an extremely effective treatment of
these disorders. ABA is a scientifically driven, validated
approach to learning and/or change of behavior and has been
widely accepted as an effective treatment. The American Academy
of Pediatrics and the U.S. Surgeon General have both issued
reports corroborating these findings.
MS. LELAKE said that most insurance policies specifically
exclude coverage for treating autism even when the services are
otherwise covered by a health plan. In the absence of coverage,
families are often forced to cover expenses out of pocket. In
the process, many risk their homes and the educations of their
unaffected children.
According to the Alaska Department of Education and Early
Childhood Development, in 1994, 37 children enrolled in special
education were classified as having autism. In 2006, that number
had grown to 477, an increase of 1200 percent.
She said for many parents school services are a substitute from
private insurance services. The goal of the educational system,
of course, is not to provide medical service. Schools provide
speech therapy and other related services to enable a child with
a disability to receive a free appropriate public education. The
ability of schools to educate children is compromised when
children with autism don't receive appropriate care through
private insurance.
MS. LELAKE said a total of 35 states and the District of
Columbia have laws related to autism and insurance coverage. At
least 25 states specifically require insurers to provide
coverage for the treatment of autism.
According to the Governor's Council on Disabilities and Special
Education, insurance coverage of treatment of ASDs will save the
state $208,500 per capita in avoided special education costs
with a lifetime savings of $1.8 million per capita.
2:30:22 PM
According to a Harvard economist's study of the societal costs
of autism, every new child diagnosed with autism that is not
treated costs an estimated $3.2 million over their lifetime. A
majority of children with autism who receive appropriate
intervention and treatment experience marked improvement; 47
percent recover typical function, 40 percent make significant
improvement and the remaining 13 percent unfortunately make
little progress.
Early intervention and treatment work, she said. Insurance
coverage of ASDs can save the state millions and significantly
improve the lives of thousands of Alaskan children and families.
MS. LELAKE said that many families are unable to afford
treatment and this limits the number of providers available in
Alaska. According to the Behavior Analyst Certifying Board
(BACB) there are currently only seven certified applied behavior
analysts in Alaska. Although, since South Carolina adopted
similar legislation three years ago, the number of certified
applied behavior analysts has increased three-fold. The
University of Alaska is working to increase the ABA workforce in
Alaska and currently 17 people are working towards
certification.
Without the help of private insurance coverage, families
affected by autism may never be able to get their heads above
water and provide their children with the medically necessary
evidence-based treatments they need. It is to the advantage of
these Alaskan families and to all of society that private health
insurance coverage provides these services.
MS. LELAKE said the supporters of this legislation are: Senator
Ellis, Representative Peterson, the Governor's Council on
Disabilities, the Mental Health Trust Authority, the Stone Soup
Group, the Alaska Primary Care Association, the Alaska
Association of Homes for Children, the Key Coalition, the Alaska
Nurses Association and many others.
2:32:33 PM
She walked the committee through the bill. Section 1, page 1,
line 1, through page 3, line 21, amends as AS 21.42 by creating
a new section AS 21.42.397 relating to insurance coverage for
autism spectrum disorders. Subsection (a), page 1, line 1,
through page 2, line 12, requires insurance plans to cover
medically necessary treatment for ASDs and exempts plans offered
by fraternal benefit societies.
Subsection (b), page 2, lines 13-23, further defines the
coverage that must be provided. Subsection (c), page 2, lines
24-25, establishes that this section does not limit coverage
already provided. Subsection (d), page 2, lines 26-28, prohibits
an insurance company from denying coverage to someone because
they have an ASD. Subsection (e), page 2, line 29, through page
3, line 21, defines "autism service provider," "autism spectrum
disorders," "health care insurance plan," "health care
insurance," and "medically necessary."
Section 2, page 2, lines 22-26, establishes that these
provisions in section 1 only apply to insurance policies issued
after January 1, 2012. Section 3, page 3, line 27, establishes
and immediate effective date.
2:34:18 PM
REPRESENTATIVE PETERSEN, sponsor of HB 79, companion bill to SB
74, said they had worked very hard on this bill going on three
years and he supported it. He said every day this bill is
delayed there are children who are losing opportunities to have
a chance at a normal life.
2:35:44 PM
TONJA UPDIKE, member, Governor's Council on Disabilities and
Special Education, said she is also the mother of an ASD child.
She very strongly supported SB 74. She said it is frustrating to
not be able to get private insurance for him. They will cover
the rest of her family, but not her ASD child. When he was
diagnosed he was not quite 2 and now he's 8 years old and has
come very far in so many ways, a real testament to the treatment
he has received. She said she knows that everybody wants to save
money, so it's important to note that if you spend money early
on to treat ASD, you're not going to be spending as much later
on through the child's life. She said 1,512 students across
Alaska are now diagnosed with autism; many more will be
diagnosed in the future.
2:38:01 PM
MILLIE RYAN, Executive Director, Governor's Council on
Disabilities and Special Education, said that the Council
strongly supports SB 74. She said their letter goes into a
little more detail and offered to answer questions.
2:38:55 PM
LEN SORREN, Legislative Affairs Group, BlueCross/BlueShield of
Alaska, said their several concerns about SB 74 were outlined in
a letter submitted to the committee. He said "this benefit
mandate" will increase costs for individual and small group
employer plans across the State of Alaska on top of federal
health care reform requirements which were implemented for most
plans in January. Individual plans at that time saw a 2-4
percent increase. Their estimates indicate that the mandate in
this bill could add as much as 3 percent to the cost of health
insurance premiums in Alaska.
He shared a cost analysis provided to the Washington State
Legislature on a very similar bill that was introduced this
session. Washington State's Office of Financial Management
estimated that the impact of the autism mandate to state health
plans would be $140 million over the two-year budget growing to
over $200 million over subsequent years.
He said any state mandates that go beyond the essential health
benefits package that will be designated under federal law must
be paid for by the state for all individuals receiving subsidies
through the exchanges. The federal government is currently
working on these benefits and he believes it is prudent to see
how their work is completed to determine whether the state would
have substantial additional benefit costs.
MR. SORREN said individual and small group insurance markets are
already under tremendous cost and price pressures and they are
concerned that SB 74 will simply add another cost burden.
2:41:34 PM
SENATOR MENARD said he was citing Washington State legislation,
but does exactly mirror SB 74?
MR. SORREN replied yes. The $140 million was a fiscal note
attached to the Washington bill that relates to the Washington
employee health plans (called Healthy Options in Washington) and
Medicaid.
SENATOR MENARD asked if he agreed that by doing nothing society
faces $3.2 million in costs over the lifetime of an autistic
child.
MS. SORREN replied that he didn't know. There are a variety of
requirements under federal law that requires ASD services
through public schools across the United States. They have some
concern that this becomes a cost transfer from the existing
federal requirement to the private insurance market in Alaska
that is already stressed.
SENATOR GIESSEL asked if SB 74 places this mandate on the State
of Alaska's insured population, that is to say, state employees.
MR. SORREN replied that he didn't know the answer, but he wanted
to provide them with the State of Washington's Office of
Financial Management estimate so they have an idea of the cost
of the mandate without specific reference to the State of
Alaska's health plan.
2:44:24 PM
SENATOR DAVIS said Washington has a bigger population than
Alaska and she asked what his estimate was for implementing SB
74 in Alaska.
MR. SORREN replied he didn't have those figures for Alaska, but
he did have an actuarial estimate that the mandate in this bill
could add as much as 3 percent to the cost of health insurance
premiums across the individual and small group markets in the
State of Alaska.
SENATOR DAVIS responded that even at 3 percent, it wouldn't come
anywhere near the Washington State figures he provided.
MR. SORREN responded, "It may or it may not." He didn't know the
number of covered persons involved in Alaska that the 3 percent
would need to be multiplied by. But by anyone's estimation, a 3
percent increase in response to a single mandate is substantial.
SENATOR DAVIS asked when would be the right time to take action
if not now.
MR. SORREN answered that it would be prudent for Alaska to wait
until the essential benefits package under the federal health
care reform bill is made clear from Washington, D.C. Then Alaska
could make an informed judgment whether this additional benefit
would be the state's cost for all subsidized folks going through
the exchange or a benefit under federal law and therefore not at
the state's expense.
The other possible avenue to think through as a way for making
this available is giving individual employers the option of
covering this in the event they chose to bear the additional
cost.
2:47:21 PM
LORRI UNUMB, counsel, National Office of Autism Speaks, South
Carolina, said she is also the parent of a child with autism,
and said she supported SB 74. She provided a power point and
asked them to go to slide 17, the hard cost data for autism
insurance.
She explained that in 2007 South Carolina passed legislation
very similar to what they are considering. So, rather than
looking at any estimates from states that are still considering
legislation, she suggested they look at the hard cost data. The
entire cost to the state for providing coverage to the state
employee health plan during 2010 was $2 million, a per-member,
per-month increase of 44 cents. So, yes, this does cost
something, but there has been no state that has documented a 3
percent cost increase or even 2 or 1 percent cost increase. The
states that now have data on this coverage have documented costs
increases of around .1 percent or .2 percent. Translated into
dollars in South Carolina that came out to 44 cents per member
per month. She didn't know of anyone who would not be willing to
an extra pay 44 cents a month so that all of the children in
Alaska could get the treatment their doctors prescribe.
She asked them to be mindful that these families are not asking
for a handout; these are families who are working, they've
bought insurance and are paying their premiums every month. They
want their end of the bargain; they have insured against medical
disaster. It has now befallen their children and they want
coverage for the recommended treatments.
MS. UNUMB said state employees are not included in the Alaska
bill, so the $100 million cost impact is not transferable to the
state even if it were a close to accurate figure. She also said
that 25 other states have already passed similar legislation.
Two states have already passed it this year and waiting for
federal health care reform is not a good reason to wait on
moving this legislation forward. They do not know what the
essential benefits package under federal health care reform will
include, but they have lots of reasons to believe it will
include ABA therapy for children with autism.
2:51:46 PM
SENATOR MENARD said for the record that she read that autism has
had a 600 percent increase over the last 20 years. Is that
nation-wide?
MS. UNUMB replied yes.
SENATOR MENARD asked Ms. Lelake what the increase is in Alaska.
MS. LELAKE replied that she didn't know the percentage, but they
do know according to the Governor's Council on Disabilities and
Special Education there are about 1500 children in Alaska with
autism. Between 1994 and 2006 the school district saw a 1200
percent increase.
SENATOR MENARD said she knows the MatSu Borough has over 2500
students (6.5 percent) with special disabilities; it is an
increasing cost that has to be looked at. She wanted realistic
numbers because of Alaska's small population.
2:53:36 PM
MARC LAMBRIGHT, principal and consulting actuary, Oliver Wyman
Actuarial Consulting, said he prepared a very detailed cross
analysis of the cost for various insurance markets in Alaska. He
said he completed similar analyses in approximately 20 other
states; and the analysis has been made available to the
committee.
Brief highlights of the report are that page 8 provides several
examples of some very low initial and ongoing costs for states
that have mandated autism coverage. Pages 9-15 of the report
provide very extensive detail regarding the drivers of cost
estimates including treated prevalency to diagnosis, ABA
utilization and unit costs. His cost estimates are outlined on
page 17; they indicate an anticipated cost per member of about
$20 per year or about $1.50 per month. That would translate into
about .04 to .05 percent of the average premiums in Alaska and
an increase of .3 to .7 percent in premiums.
He said there has been no indication anywhere cost data has been
collected that costs have been anywhere near the 3 percent level
and typically they are less than one-half of 1 percent.
Secondly, he said there have been a lot of other independent
actuarial analyses completed and typically the cost estimate
outlined in them is one-half of 1 percent of premium.
2:56:29 PM
KARA THRASHER LIVINGSTON, representing herself, said she
supported SB 74. She said she has two children who experience
autism and received early intervention and special education
from the school district. But it would have been nice to have
the choice of having their therapy covered by insurance as well.
Having worked in long term care, she can understand how having
enhanced early intervention available through therapy such as
ABA would result in lower costs over a child's lifespan. She
thought Alaskans would be willing to pay the added cost.
2:58:17 PM
DEBBIE THOMPSON, Executive Director, Alaska Nurses Association,
said they support SB 74. It is the right thing to do.
They must look at what the costs are now as opposed to what they
would be later in an autistic child's life. The treatment will
impact the lives of not only the child with autism, but all of
their family members and those that are around them.
2:59:13 PM
LINDA ROBERTSON, business partner, Step-In Autism Services of
Alaska, Fairbanks, supported SB 74. They are finding families
that are very desperate for services and they can't provide
them, because these families are not able to provide insurance
payments and are not eligible for Medicaid or Tri-Care
Insurance. The reason they provide ABA applied behavior analysis
is because it is the most effective treatment they have found
for kids with autism. She said she had worked in Alaska since
1981 and has spent 35 years as a special educator and found that
children with autism are the most difficult to reach and applied
behavior analysis allows them to do that. The right services
provide incredible differences.
MS. ROBERTSON said the intensive ABA is not offered in the
school system, although many families get it privately. She said
they are very eager to bring this service to as many families in
Alaska as possible who have children with autism or other
disabilities.
3:01:39 PM
EMILY ICE, business partner, Step-In Autism Services of Alaska,
Fairbanks, offered her support for SB 74, as well.
SENATOR GIESSEL said one paper provided by Ms. Hall summarized
those who are affected by SB 74. It says self-insured plans are
not currently subject to mandates. That means that TERS and PERS
beneficiaries would not be required to provide this coverage.
LINDA HALL, Director, Division of Insurance, Department of
Commerce, Community and Economic Development (DCCED), answered
that is accurate.
SENATOR GIESSEL said that shows to be 34 percent of the state's
population. And 15 percent of the plans that are directly
affected by SB 74 are those that are bought privately.
MS. HALL agreed.
SENATOR GIESSEL asked if that includes small businesses and
employers that provide insurance.
MS. HALL replied yes; it applies to the individual market and
predominantly the small group market. Most but not all large
employers do their health benefits through a self-insured plan
which is regulated the federal Department of Labor.
SENATOR GIESSEL asked if Medicaid in Alaska currently provides
some treatment for ASD.
MS. HALL replied that she didn't know what Medicaid covers.
SENATOR GIESSEL asked if SB 74 would affect Medicaid.
MS. HALL replied no.
SENATOR GIESSEL asked if she said the Indian Health Service
already covers autism.
MS. HALL replied that she would not have commented on those
types of programs, because she didn't have any particular
knowledge of them.
SENATOR GIESSEL said she was trying to figure out who is going
to be affected by SB 74 and it looks like on her chart that it's
going to be 15 percent of the Alaska population. Is that true?
MS. HALL replied that is true; when you add a mandate to Title
21, the insurance code, it only impacts the private regulated
insurance market unless the bill contains other provisions that
broaden the mandate.
SENATOR GIESSEL asked what she thought about the added costs
being applied to only 15 percent of the state's population.
MS. HALL replied that she didn't have that estimate. She said
her division does a rate review of just one company and she
wouldn't have any way to estimate the cost of a particular
mandate going forward.
SENATOR GIESSEL asked how many insurance mandates Alaska has
now.
MS. HALL replied 15 benefit mandates.
SENATOR GIESSEL asked how much that adds to the cost of the
premium.
MS. HALL answered that don't have that information although they
have tried to get it.
3:08:25 PM
SENATOR PASKVAN asked if testimony about avoided costs is
accurate.
MS. HALL replied that she didn't have any idea about the other
costs.
SENATOR GIESSEL asked her why the cost of health care is higher
in Alaska than in other states.
MS. HALL answered no; their study only shows what the
differentials are and that Alaska has the highest health care
costs in the country. Correspondingly, Alaska also has the
highest health insurance premiums in the country. She estimates
just between Seattle and Anchorage there is anywhere from a 30
to 150 percent higher cost for procedures in Alaska.
CHAIR EGAN asked if the administration had a position on SB 74.
MS. HALL replied that the administration had not taken a
position.
SENATOR GIESSEL said she thought there were things they don't
know about the impacts of adding this mandate to the 15 percent
of Alaskans. Already, 16 percent of the Alaska population can't
afford health insurance now and she wanted more information
about what the premiums would look like.
SENATOR PASKVAN said they had heard a lot of testimony about how
the avoided costs of early treatment are so significant that the
cost of not doing something to society is much greater than the
cost of the de minimis expenditure at this time. He would like
to move the bill.
SENATOR DAVIS said she would like to move it, too. But she
stated that she didn't think the impact would be on just the 15
percent population and that other agencies provide some services
for autism.
SENATOR GIESSEL clarified that the cost of this will be shifted
to 15 percent of the population who are at this time under state
regulated health insurance. Her concern is that this will shift
the cost to small businesses that are struggling right now to
provide insurance for their employees and are managing to do it;
but additional cost will cause those employers to maybe say they
can no longer provide insurance. Moving that 15 percent piece of
the pie over to the 16 percent of uninsured in Alaska will
escalate health care problems.
SENATOR PASKVAN moved to report SB 74 from committee with
individual recommendations and attached fiscal note. There were
no objections and it was so ordered.
3:14:56 PM
At ease from 3:14 PM to 3:16 PM.
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