Legislature(2011 - 2012)BELTZ 105 (TSBldg)
04/14/2011 02:00 PM LABOR & COMMERCE
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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.