Autism treatment law again shows insurers' need for therapy

Gov. Jerry Brown has signed into law a bill requiring health insurers to include coverage for treatments associated with autism.

When I read that Monday, my first thought was: Why aren't such treatments already covered?

But my question was quickly answered by a statement from the California Assn. of Health Plans, an industry group, which warned that the new law will "drive up healthcare costs for families and businesses by nearly $850 million a year."

In other words, it's all about the money.

California's new law highlights the fact that an insurance system led by profit-focused market forces often leaves people out in the cold. It also shows that government clearly has a role to play in healthcare when private companies fail to meet the responsibilities of a civilized society.

Autism, like nearly all chronic conditions, is expensive. It requires not just medical treatment but also extensive educational, behavioral and vocational support.

A study from the Harvard School of Public Health found that direct medical and nonmedical costs for a severely autistic person can run as much as $72,000 a year. People with milder forms of autism can face costs of about $67,000 annually.

No wonder health insurers don't want a piece of that action. It's like having a hole in your pocket.

But what's the alternative? Leaving families of people with autism to fend for themselves?

Insurers have long argued that behavioral therapy, such as teaching autistic children to interact with others, is not medical treatment, and therefore shouldn't be covered by medical insurance.

They also fret about the slippery slope of having to cover other behavioral therapies, such as group homes for people with schizophrenia. "One of our concerns is what this could lead to down the road," said Nicole Evans, a spokeswoman for the California Assn. of Health Plans.

Patient advocates say insurance should cover whatever works.

"The only people who don't think of behavioral therapies as a medical treatment are insurance companies," said Kristin Jacobson, co-founder of the Alliance of California Autism Organizations and a leading proponent of the new state mandate.

"The rest of the medical community is united in seeing these treatments as medically necessary," she said.

I honestly don't know how parents of autistic kids cope with the myriad challenges that accompany the disorder.

My wife and I are friends with a couple who have two severely autistic children. It's only because the father pulls down a hefty paycheck (from, as it happens, a major pharmaceutical company) that they can cover the various therapies required to try to give their kids something like a normal life.

For the mother, it's a full-time job staying on top of things. She often looks like she's just wandered back from a war zone.

Marcia Eichelberger is president of the Autism Society of California and mother of a 19-year-old with autism. She said there's no question that receiving behavioral therapy has given her son a chance at independence and helped keep him from even costlier institutionalization.

"Had we not done these types of interventions with our son, his frustration level would have been so great that he couldn't have stayed at home with his family," Eichelberger said.

California's new mandate — SB 946 — was authored by state Senate leader Darrell Steinberg (D-Sacramento). He hailed Brown's approval of the bill as "a critical victory for thousands of California children and families. For many of them, having this therapy covered by their insurance is the difference between despair and hope."

Twenty-six other states and the District of Columbia have already passed similar mandates for coverage of people with autism.

The California Assn. of Health Plans says that many treatments are already covered in one way or another. The state does have programs to assist autistic people, although those programs are increasingly jeopardized by budget cuts.

The association also emphasizes that the new mandate for coverage will cause premiums to increase for individuals and employers.

"At a time when lawmakers voice concern about rising healthcare costs, it makes no sense to sign a new law that will raise healthcare costs by $850 million a year," said Patrick Johnston, the group's president.

That sky-high number comes from a study commissioned by the industry group. A separate study for the state Legislature by the California Health Benefits Review Program estimated that the cost to insurers of implementing the law would be closer to $93 million.

Whatever the actual cost, the bottom line is how we, as a society, address the healthcare needs of those less fortunate than ourselves (assuming that your kids aren't autistic and you'll never have direct need of these therapies).

Here's a quick refresher for all those who may have skipped school the day that insurance was taught in Econ 101: The essential idea of insurance is that a vast pool of people pay into a program that provides a safety net in case trouble should arise.

Hopefully, you'll never need that safety net, but at least you have peace of mind from knowing it's there. For those who do need it, their costs are borne by the reservoir of money that's accumulated from the rest of the group funding the system.

The larger the risk pool, obviously, the less expensive it is to beneficiaries and potential beneficiaries to receive coverage.

Needless to say, that's not how we do things in this country. Rather than a Medicare-for-all system that places all taxpayers in the same far-reaching risk pool, we carve up health coverage into large and small employee groups, and leave the self-employed largely to protect themselves as best they can.

Not surprisingly, about 50 million people nationwide now lack health insurance, according to the Census Bureau. Those people often turn to expensive emergency treatments that drive up costs for people with insurance and for taxpayers.

This makes a powerful case for a government role in ensuring that all people have health coverage. If nothing else, the government has an obligation to step in when the private sector, out of a sense of financial self-preservation and fiduciary obligations to shareholders, evades a responsibility to provide coverage to all.

It took an intervention by state lawmakers to get insurers to do the right thing. Clearly this is an industry that would benefit from some behavioral therapy.

David Lazarus' column runs Tuesdays and Fridays. He also can be seen daily on KTLA-TV Channel 5. Send your tips or feedback to david.lazarus@latimes.com.

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