Legislature(2009 - 2010)BUTROVICH 205

03/15/2010 01:30 PM HEALTH & SOCIAL SERVICES

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved SB 307 Out of Committee
Heard & Held
Moved CSSCR 13(HSS) Out of Committee
Bills Previously Heard/Scheduled
         SB 250-INS. COVERAGE: AUTISM SPECTRUM DISORDER                                                                     
2:20:05 PM                                                                                                                    
CHAIR  DAVIS  announced  consideration   of  SB  250.  She  asked                                                               
Representative  Peterson   if  he  would  like   to  present  the                                                               
companion to SB 250, which he introduced in the House.                                                                          
REPRESENTATIVE PETE  PETERSEN, sponsor of HB  187, encouraged the                                                               
committee  to  ask questions  of  the  autism experts  that  were                                                               
CHAIR DAVIS  said it was not  her intent to move  the bill today.                                                               
She asked Mr. Obermeyer to present the bill.                                                                                    
2:22:13 PM                                                                                                                    
TOM OBERMEYER,  staff to Senator  Davis, said he was  speaking to                                                               
the committee  substitute (CS) for  SB 250,  labeled 26-LS1400\R.                                                               
He read the sponsor statement into  the record. [A copy is in the                                                               
bill file.]                                                                                                                     
He  related  that SB  250  mandates  coverage for  diagnosis  and                                                               
treatment of autism spectrum disorders  (ASD) in any plan offered                                                               
by the  health care  insurer. Early treatment  has been  shown to                                                               
improve the symptoms of ASD  and sometimes eliminate the need for                                                               
special education  for a child with  ASD. This is the  proper way                                                               
to deal  with this problem  and it saves  a great deal  of money,                                                               
Mr. Obermeyer said.                                                                                                             
MR.  OBERMEYER   pointed  out  that  self-funded   health  plans,                                                               
including the  "Alaska Care"  plan, would  likely be  exempt from                                                               
the bill  because they  are preempted by  the federal  ERISA law.                                                               
However,  the   state  historically   has  complied   with  state                                                               
insurance laws.                                                                                                                 
The Center for Disease Control (CDC)  reports that about 1 in 110                                                               
children  are affected  by ASDs,  but it  is much  more prevalent                                                               
among  boys. This  is an  increase from  10 years  ago, but  it's                                                               
unclear if this increase is due  to a broader definition of ASDs,                                                               
better diagnoses, or  a combination. Many children  who have been                                                               
diagnosed  go  untreated because  ASD  often  is not  covered  by                                                               
insurance plans. The cost to families is overwhelming.                                                                          
MR.  OBERMEYER   related  that   the  federal   Autism  Treatment                                                               
Acceleration Act of 2009 is  pending legislation and implementing                                                               
SB 250 now  would allow insurers and the state  time to adjust to                                                               
the  requirements of  this law.  Also,  he said,  it would  bring                                                               
health care  professional and jobs  to the state. Since  March of                                                               
2009, 11 states have passed legislation  similar to SB 250 and 19                                                               
states  have introduced  legislation. SB  250 will  significantly                                                               
help the hundreds of Alaskans  suffering from these disorders, he                                                               
2:29:19 PM                                                                                                                    
SENATOR PASKVAN moved to adopt  the proposed committee substitute                                                               
(CS) for  SB 250, labeled  26-LS1400\R, as the  working document.                                                               
There being no objection, version R was before the committee.                                                                   
2:29:44 PM                                                                                                                    
LORRI UNUMB,  Senior Policy Advisor  and Counsel,  Autism Speaks,                                                               
Columbia,  South  Carolina,  said   this  is  a  national  autism                                                               
science, research,  and advocacy  organization. She  informed the                                                               
committee that she is a former  law professor and the parent of a                                                               
child with autism; she now  advocates full time for children with                                                               
autism and work nationwide on  autism insurance reform. She noted                                                               
that she  would speak  to the PowerPoint  handout in  the packets                                                               
focusing  on the  experience  in other  states  that have  passed                                                               
autism insurance reform.                                                                                                        
Slide 6 depicts a  map of the U. S. showing  the states that have                                                               
passed autism  insurance reform.  At Autism Speaks  they consider                                                               
that  15 states  have  enacted meaningful  reform,  she said.  In                                                               
these states  kids can get  the kind and  close to the  amount of                                                               
therapy that's  been prescribed for  them. Indiana  and Minnesota                                                               
passed legislation  in 2001 so  cost data is available,  but it's                                                               
nearly  ten years  old. South  Carolina and  Texas were  the next                                                               
states to pass legislation in  2007; more states followed suit in                                                               
2008 and  2009. As previously  mentioned, legislation  is pending                                                               
in 19 states.                                                                                                                   
MS. UNUMB directed  attention to slide 7  that contains excerpted                                                               
data  from  an  insurance   advocacy  association  report  titled                                                               
"Health  Insurance Mandates  in  the States."  It indicates  that                                                               
covering autism  has impacted  premiums by  less than  1 percent.                                                               
This is  compared to other  mandated treatments  like alcoholism,                                                               
contraceptives, in vitro fertilization,  and prescriptions all of                                                               
which are higher.                                                                                                               
Slide 8 contains  actual cost data from South  Carolina after the                                                               
autism insurance statute became  applicable to the state employee                                                               
health plan  in January 2009. The  state has a population  of 4.5                                                               
million and the  state employee health plan  has 350,000 members.                                                               
When  the  legislation was  introduced  the  state budget  office                                                               
initially  estimated  that this  coverage  would  cost the  state                                                               
$18.9 million and that was later  revised down to $9 million. The                                                               
actual claims date  for all of 2009 shows that  it cost the state                                                               
$856,371.  This translates  to  a 20  cent  premium increase  per                                                               
member per  month to provide  all the  kids with autism  in South                                                               
Carolina with the coverage they  need. The South Carolina statute                                                               
is  a little  different  than  what SB  250  proposes because  it                                                               
provides  coverage  only  through  age 16  and  it  caps  applied                                                               
behavior analysis (ABA) therapy at  $50,000 per year. The Harvard                                                               
study  indicates  that the  lifetime  cost  for each  child  with                                                               
autism who does not get treated  is $3.2 million so if you're not                                                               
motivated by  the human  aspect, think about  if from  the fiscal                                                               
perspective, she said.  Fully 50 percent of the  kids who receive                                                               
treatment will go right into  a mainstream first grade classroom,                                                               
saving the state an awful lot of money, she concluded.                                                                          
2:38:42 PM                                                                                                                    
SENATOR PASKVAN asked what policy  issues caused [South] Carolina                                                               
to cap coverage at age 16 and $50,000.                                                                                          
MS. UNUMB replied  she selected age 16  somewhat randomly without                                                               
any  scientific  basis.  Most  of the  states  that  have  reform                                                               
selected  age  18-22.  The original  legislation  didn't  have  a                                                               
therapy cap,  but the insurance  industry argued in favor  of one                                                               
on  the ABA  therapy because  they couldn't  estimate that  cost.                                                               
When the  legislature asked  her to  write in a  cap, she  put in                                                               
$75,000 because  that's the  cost of  her son's  therapy. Shortly                                                               
before the bill passed the cap was negotiated down to $50,000.                                                                  
Slide 10  has a chart comparing  the age and ABA  therapy caps in                                                               
six states with  reform statutes. She offered to  provide a chart                                                               
that compares all 15 states in some detail.                                                                                     
CHAIR DAVIS said that would be helpful.                                                                                         
2:42:18 PM                                                                                                                    
SENATOR DYSON questioned why treatment  for this disability isn't                                                               
paid for  out of the  tax base as  opposed to insurance.  Here in                                                               
particular  it would  be a  very  selective and  disproportionate                                                               
sharing of the burden.                                                                                                          
MS. UNUMB replied some states  have attempted to provide coverage                                                               
through the Medicaid  waiver program, but it  isn't sufficient to                                                               
treat  all  the kids.  Even  with  a  very favorable  70  percent                                                               
federal  match, South  Carolina  has two  to  three year  waiting                                                               
lists of several  hundred children. That doesn't do  a child with                                                               
autism  any  good  because  the   early  intervention  window  is                                                               
critical  for rewiring  the brain.  She added  that autism  is at                                                               
core  a  medical  issue  and  for the  people  who  have  private                                                               
insurance it seems only fair that private insurance play a part.                                                                
SENATOR DYSON thanked her for a thoughtful response.                                                                            
2:46:24 PM                                                                                                                    
SENATOR THOMAS referenced the actual  2009 cost data she provided                                                               
for  the  South  Carolina  state   employee  plan  and  expressed                                                               
disbelief  that treatment  per  child could  cost  so little.  He                                                               
asked how she arrived at $856,000.                                                                                              
MS. UNUMB  said she believes that  cost will rise as  more people                                                               
take  advantage of  the coverage,  but she  doesn't it  will ever                                                               
approximate the state's $9 million estimate.                                                                                    
She referenced  slide 2 showing the  five pervasive developmental                                                               
disorders  (PPD). Within  the five  PDDs there  are three  autism                                                               
spectrum   disorders   (ASDs):  autistic   disorder,   Asperger's                                                               
syndrome, and  pervasive developmental  disorder -  not otherwise                                                               
specified (PDD-NOS).  Autistic disorder  accounts for 1/3  of all                                                               
ASDs,  Asperger's syndrome  accounts  for less  than  1/6 of  all                                                               
ASDs,  and the  milder PDD-NOS  accounts  for 1/2  of all  autism                                                               
spectrum disorders.  The kids  in the  first category  are severe                                                               
and they  are prescribed the intensive  behavioral therapy. While                                                               
the  prevalence of  PDD  is 1  in  110, only  1/3  have a  severe                                                               
diagnosis and  only some of  those will  be prescribed a  full 40                                                               
hour per  week ADA therapy program.  And not all of  the ones who                                                               
are prescribed  the intensive program  will take advantage  of it                                                               
because it takes place in  your home and is incredibly intrusive.                                                               
Not every  family is  willing to  make the  lifestyle adjustments                                                               
and in rural areas there may be provider issues.                                                                                
One reason  that South Carolina's fiscal  note was so far  off is                                                               
that  the   budget  analyst  took   the  prevalence   number  and                                                               
multiplied it by the cap. They  assumed that every child would be                                                               
prescribed and  get the  maximum treatment,  but it  doesn't work                                                               
that way. In South Carolina 62,000  kids were within the age 2-16                                                               
target  range  and just  64  were  actually prescribed  and  took                                                               
advantage of the therapy in 2009.                                                                                               
SENATOR THOMAS asked  if she has examples from  other states that                                                               
have had  legislation in place  for a  longer period of  time and                                                               
why she  included a slide  that lists businesses that  have self-                                                               
funded ERISA plans.                                                                                                             
2:53:07 PM                                                                                                                    
MS.  UNUMB  said it's  difficult  to  get detailed  data  because                                                               
private insurers  are less  forthcoming, but  she does  have data                                                               
from Minnesota. That benefit has neither  an age nor a dollar cap                                                               
and it's  been in effect  for nine years. Blue  Cross/Blue Shield                                                               
said that the  average utilization on an ABA  program was $30,000                                                               
per year  and the premium increase  has been $.83 per  member per                                                               
month. She noted that Autism  Speaks hired an independent actuary                                                               
to conduct  an analysis on  the companion bill  to SB 250  and he                                                               
projected a cost of $1.34 per member per month.                                                                                 
She  explained that  she included  the information  on the  ERISA                                                               
plans because  she likes to point  out that when a  state chooses                                                               
to  mandate  a benefit  many  ERISA  regulated plans  voluntarily                                                               
follow  suit. The  slide offers  a small  list of  companies that                                                               
have elected to provide an  autism benefit. She believes that the                                                               
Microsoft  administrator is  Premera Blue  Cross Blue  Shield and                                                               
she understands they are a predominant insurer in Alaska.                                                                       
SENATOR PASKVAN asked if there's  a rational explanation for some                                                               
states placing a different dollar cap on therapy based on age.                                                                  
MS.  UNUMB replied  they're the  result of  a political  process.                                                               
Some states have  decided that kids don't need  as much treatment                                                               
once  they enter  school  and  that might  be  true depending  on                                                               
2:57:28 PM                                                                                                                    
SHEELA  TALLMAN, Legislative  Affairs,  Premera  Blue Cross  Blue                                                               
Shield  of  Alaska,  confirmed that  this  legislation  will  not                                                               
impact self-funded  plans, which  are subject  to ERISA  and it's                                                               
not subject to state mandates.  However, the bill will impact the                                                               
40 percent  of the market  that represents individuals  and small                                                               
employers in Alaska  that are already price  stressed. It imposes                                                               
a mandate  on health  insurers like Blue  Cross by  requiring all                                                               
policies to include coverage for ASDs including social skills-                                                                  
based therapies  that generally considered  outside the  realm of                                                               
health  care.  They estimate  that  this  mandate could  increase                                                               
health insurance premiums up to 3 percent so it's not cost free.                                                                
2:59:15 PM                                                                                                                    
SENATOR PASKVAN  asked if  she disputes  the estimated  $1.34 per                                                               
person per month premium increase.                                                                                              
MS. TALLMAN replied  they believe it will be  slightly higher but                                                               
she doesn't have the exact number.                                                                                              
SENATOR PASKVAN asked if the premium  would likely be lower if it                                                               
were spread over a larger population base.                                                                                      
MS. TALLMAN replied their calculations  already include the small                                                               
and large groups of insured.                                                                                                    
CHAIR DAVIS asked if she could  meet with the committee again and                                                               
provide the additional information.                                                                                             
MS. TALLMAN agreed to do so.                                                                                                    
CHAIR DAVIS held SB 250 in committee.                                                                                           

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