The dramatic increase in the number of children and adults diagnosed with ASD (Centers for Disease Control and Prevention 2007
; Fombonne 2003
), combined with the high cost of their care, has caused many states to consider other alternatives to pay for this care (Shattuck and Grosse 2007
). Some states have increased the public contribution to these services. For example, Colorado, Indiana, Kansas, Maine, Maryland, Pennsylvania and Wisconsin, have or are considering Medicaid waivers, which would allow states to use Medicaid funds to pay for services not included in their Medicaid plan, or to cover individuals that otherwise would not be Medicaid eligible. Other states have increased the private contribution to these services. Many private insurance companies severely limit coverage of behavioral health services for individuals with autism or exclude coverage altogether. In response, Arizona, California, Indiana, Kentucky, Louisiana, Mississippi, Pennsylvania, South Carolina, Texas, West Virginia and Wisconsin all recently considered legislation that would mandate private insurance companies to pay for autism-related healthcare services. This legislation has met with varying degrees of success, with legislation not passing in Mississippi, West Virginia or Wisconsin. Successful legislation has varied tremendously in the ages of covered individuals, the types and quantity of covered services, and annual caps on associated expenditures. As of this writing, many other states, including Connecticut, Florida, Illinois, Michigan, Missouri, and Oklahoma, recently have introduced similar legislation.
A major challenge to these insurance mandates has been the concern that they will result in increased premiums for policy holders. Since most policy holders are employers, increases in premiums may be passed onto employees in the form of a net loss of wages or loss of employment, although the effect of mandates on both has been debated in the literature (Collins et al. 2005
; Hopkins and Zweifel 2005
; Klerman and Goldman 1994
; Sommers 2005
; Wolaver et al. 2003
). Insurance companies therefore have argued that an autism insurance mandate would result in a burdensome rate increase. Autism advocates, on the other hand, have argued that the burden associated with a rate increase would be outweighed by the benefits to individuals with autism and their families.
To help inform the debate surrounding autism insurance mandates, one of the authors (JB) developed an equation to estimate the effect of mandates on premiums, using information easily available on the Internet. In the following, we present the general equation and rationale, and use data from Pennsylvania, which has recently passed legislation, House Bill (HB) 1150, as an example. HB 1150 requires insurance companies to cover healthcare services for children with autism, from birth up to age 21. Specifically mentioned in HB 1150 are behavioral interventions such as applied behavior analysis. Annual per capita expenditures are capped at $36,000.