Autism and Insurance

One of my favorite autism researchers is a guy named David Mandell. The reason is simple: he just asks good questions.

For example, he studied Vocational Rehabilitation and compared the results for autistics and non-autistic adults. There’s a guy looking at issues that will matter to me all too soon, and already matter to a lot of people already (people all too often forgotten even within greater the autism community: adults).

He looked at adult populations in psychiatric hospitals and found that many adults diagnosed with schizophrenia may be autistic.

Now he has addressed a big question: how much would adding insurance mandates for autism increase the premiums?

This question comes up a lot. For example, in California one of the big questions has been how can Kaiser get away without providing insurance coverage, even though California has an autism insurance mandate (AB88).

The YouTube video is about the first person to win coverage for therapies like Speech, Occupational and ABA from Kaiser:

Kaiser said this will “Significantly increase the cost” of insurance, with “their actuaries” estimating would be $5 to $7 per member per month.

As an aside, the Kaiser person in this meeting was dodging the question, and it is annoying that the interviewer let her do it. The question isn’t about how much it will cost, but the fact that California already mandates that the insurers cover the therapies and that kaiser is avoiding it’s legal responsibility.

As another aside—this is what insurance is for. We pay a little bit to share the risk. If it costs us all a little bit so that some small group gets help when they need it. We don’t question it when we are talking about, say, therapies for a stroke victim or someone in a bad accident. Why do we question it when it comes down to children with developmental delays?

Pennsylvania recently passed a mandate requiring autism insurance coverage with a $36,000 cap per year. Dr. Mandell works in Pennsylvania and used his state as an example in his paper, Quantifying the Impact of Autism Coverage
on Private Insurance Premiums.

That’s a RBQ (really big question) that comes up a lot when people are working on getting autism insurance mandates in their state: what will the cost be? Insurers, as one could imagine, claim the costs will be big. (again, avoiding the question of whether it is the right thing to do).

I won’t go into the details of the model Dr. Mandell’s team used. It was actually pretty straightforward, just as you would probably expect. Instead, let’s take a look at results. Figure 1 shows the increase in insurance premiums if autism therapies are covered.

The y-axis is the percent increase in insurance premiums, and the x-axis is the average expenditure per child with autism (in $1000’s). The model gives estimates for average expenditures from $10,000 to $36,000 (the cap in the Pennsylvania insurance mandate). Estimates are given for 3 different autism prevalences: 2.0 per 1000, 4.0 per 1000 and 6.7 per 1000. Note that 6.7 per 1000 is the same as 1 in 150.

Take a look at the highest estimate: $36,000 per child, 1 in 150 prevalence. Increase in insurance premiums? 2%. Yep, 2%.

Or, in the words of the study authors:

Even in the unlikely event that treated prevalence were to rise to the accepted community prevalence of 1 in 150 children, and per capita expenditures rose to $36,000 per year, the increase in the family contribution would reach $6.53 a month, or $78.31 per year

This may be the same amount as the Kaiser actuaries claimed. They claimed about $5-7 per “member”. Usually “member” means the primary insured (I.e. the parent whose job gives the insurance coverage). If, instead, they mean $5-7 per every insured family member, then Kaiser’s estimate is likely about 4x higher than prof. Mandell’s team’s calculation.

Prof. Mandell’s team recognizes that this $78.31 per year is likely an over estimate.

To that extent, the estimates presented here may overestimate actual increases to premiums, given that some healthcare expenditures would remain the same but now would be associated with an ASD diagnosis.

One reason they give is that many children with autism may already be receiving insurance paid medical treatment, but under a different diagnosis. I.e. doctors may be avoiding the autism label in order to get reimbursed. So, for some kids and some therapies, an “autism” mandate may just shift the costs already being paid by the insurance companies from some other diagnosis to autism.

Another reason why this estimate may be low comes to my mind, even though it isn’t discussed in the paper. I know this is anecdotal, but medical expenses are likely highest for younger kids. That’s when the OT, ST, and ABA type therapies will be most common. It doesn’t make sense that the average expenses would be the same for older kids as for younger kids. So, when they calculate based on $36,000 per child per year, they are likely overestimating the expenditures for the older kids (say ages 10-20).

Another possible cause of over-estimating the expenditures. When they estimate for the full CDC prevalence (1 in 150, or 6.7 per 1000), they are including all ASD ’s. People with, say, Aspergers or PDD -NOS have significant challenges, no doubt. However, my guess is that they do not require the same level of medical expenses as someone with autistic disorder. So, by assuming the prevalence for all ASD ’s, Dr. Mandell’s group may have overestimated the expenses.

Now, it is worth noting that when one includes ABA in the picture, $36,000 per year may not cover everything. A 20 hour week program could cost more than $36,000.

But, leave all of that out for now. Take the high end estimate and ask, will a 2% increase in premiums to make such a big difference? I know there is a risk of this discussion getting sidetracked into an ABA discussion. But, consider adding 2 sessions a week of speech therapy and/or 1 session a week of OT to a young autistic kid’s life. Think of the difference that could make. These are life-long benefits. Isn’t that worth something comparable to, say, the amount of insurance premiums we pay to cover heart surgeries or other very expensive medical interventions for adults?

Or to put it another way: if my insurance company said, “Sure, we can give your autistic kid these therapies now. But, if you ever have a heart attack, you are going to die on the table because we won’t pay for heart surgery.” I’d sign on the bottom line. No, I am not asking everyone to make that choice, or to sacrifice their own benefits for other people’s kids. But, isn’t improving the life of a young child worth at least as much as what we spend to improve the life of older adults?

James N. Bouder, Stuart Spielman, David S. Mandell (2009). Brief Report: Quantifying the Impact of Autism Coverage on Private Insurance Premiums Journal of Autism and Developmental Disorders DOI: 10.1007/s10803-009-0701-z

This paper has also been discussed in the Translating Autism blog, which is where I found out about it.