Insurers Claim Proposed Law May Cost $850 million

A newly proposed mandate to cover behavior therapy for autistic children would cost the California insurance industry $850 million a year, according to the California Association of Health Plans, potentially shifting a significant burden of the care from the public to the private sector. The figure was based on a study conducted by the Taylor-Feldman Group for the California Association of Health Plans. It was immediately dismissed as “grossly inflated” by advocates of the new mandate, SB 946, passed by the Senate in early September. The California Health Benefits Review Board said the proposed mandate would only increase insurance costs by $99 million, or 40 cents to 80 cents per member per month. The bill is due for action by Gov. Jerry Brown before Oct. 9th. As of publication (Oct. 6), Brown had not acted on the bill. If he does nothing, the bill becomes law. The San Fernando Valley region is a major hub for insurance companies and is one of the Valley’s largest employers. Health Net Inc., Blue Shield of California, Anthem Blue Cross and WellPoint Inc. are all large employers in the area. Asked for comment on the mandate before the governor, Blue Shield, Anthem and WellPoint all referred comments to the California Association of Health Plans. “At a time when lawmakers voice concern about rising health care costs, it makes no sense to sign a new law that will raise health care costs by $850 million a year,” Patrick Johnston, president of the California Association of Health Plans, said in a statement. What’s more, Johnson noted, families covered by Medi-Cal, CalPERS and Healthy Families, would not receive the same coverage due in part to the state’s fiscal woes. The mandate aims to cover applied behavior therapy (ABA), which those in the mental health field say is a critical and proven early intervention for autistic children. The treatment costs give autistic children 25 to 40 hours a week with a therapist at an average cost of $40,000 per child, per year. The cost of health insurance increased 9 percent nationally in 2010, the largest premium increase in six years, according to new figures from the Kaiser Family Foundation and the Health Research & Educational Trust. Premiums for families reached $15,073 on average, up from $13,770 a year ago. Insurance industry executives said the mandate would most certainly drive up premiums. A spokesman for CAHP would not speculate on what that actual premium impact would be. Brad Kieffer, a spokesman for Woodland Hills-based Health Net Inc. added that the Kaiser Family Foundation report “demonstrates that the rising cost of health care is fueling the rising cost of health insurance. Reducing or taming the cost of care is essential in preserving the affordability of health insurance coverage.” Advocates for SB 946 say insurance coverage is critical, partly because the state’s own fiscal crisis has resulted in cutbacks on funding for services for children with autism or autism spectrum disorders (ASD). Families with children who suffer from the condition can typically seek help from 21 state agencies that provide services and care to children diagnosed with autism or ASD. The centers, run by the California Department of Developmental Services, diagnose children and prescribe services such as applied behavioral therapy. School-age children also receive services through their local public school. DDS has faced steep budget cutbacks in the past two years and services have been curtailed. Ronit M. Molko, chief executive officer of Autism Spectrum Therapies, a Long Beach-based provider of services for autistic children serving roughly 1,000 children in the greater Los Angeles area, said the state has cut weekly hours for behavior therapy from 25 to 6 in recent months. The agency has proposed $334 million in cutbacks to help reduce the state’s massive budget deficit, according to the agency’s website. Molko said insurance coverage for behavior therapy would go a long way toward plugging that shortfall and making sure that children get the services they need at a young age. “It would be really unfortunate if we could not provide these children the help they need,” Molko said. It’s early intervention that ultimately reduces the cost of autism to society, she added. “SB 946 makes it clear, once and for all, that behavioral therapy is a covered benefit under health insurance plans,” said Sen. Darrell Steinberg, who introduced the bill. “Insurance companies can no longer promise one thing, and then set up every possible road block to prevent it.” Kristin Jacobson, founding member the Alliance of California Autism Organizations and president of Autism Deserves Equal Coverage, said she has seen thousands of families be denied insurance coverage for services related to autism. She herself has helped appeal and win 150 to 175 cases on behalf of families, she said. “We have 100,000 families affected by this disease in California,” she said. “The struggle that families go through on a daily basis is beyond imagination. On top of that, they have to constantly do battle with their health plan.” Jacobson also noted that the insurance industry’s figures are “grossly inflated.” She pointed to a study by the California Health Benefits Review Board which she said estimated that insurance premiums would only rise 0.14 percent to 0.24 percent as a result of the new mandate. Some 27 other states have passed mandates requiring insurance companies to cover applied behavior therapy.