Interim Joint Committee on Banking and Insurance


Minutes of the<MeetNo1> 1st Meeting

of the 2009 Interim


<MeetMDY1> August 25, 2009


The<MeetNo2> 1st meeting of the Interim Joint Committee on Banking and Insurance was held on<Day> Tuesday,<MeetMDY2> August 25, 2009, at<MeetTime> 9:45 AM, in<Room> Room 149 of the Capitol Annex. Representative Jeff Greer, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members>  Representative Jeff Greer, Co-Chair; Julie Denton, John Schickel, Dan "Malano" Seum, Tim Shaughnessy, and Brandon Smith; Representatives James R. Comer Jr., Will Coursey, Ron Crimm, Robert R. Damron, Mike Denham, Tim Firkins, Danny Ford, Jim Gooch Jr., Mike Harmon, Jimmy Higdon, Dennis Horlander, Brent Housman, Adam Koenig, Brad Montell, Jody Richards, Steve Riggs, Arnold Simpson, Kevin Sinnette, Wilson Stone, John Tilley, Ken Upchurch, and Ron Weston.


Guests:  Ann Gregory, Dr. Stacy Trinkle, Janet Pope, Lorri Unumb, Autism Speaks South Carolina, Jeff Hadley, Louisville Home of the Innocents, Dr. Eric DeYoung, and Melodie Shrader, Kentucky Association of Health Plans.         


LRC Staff:  Rhonda Franklin, Chad Collins, Emily Bottoms and Jamie Griffin.


Ann Gregory, parent of an autistic child, introduced the speakers who would be addressing the committee.  Ms. Gregory thanked the committee for their time and consideration.


Janet Pope stated that she is a parent of an autistic son “Austin”, who when initially diagnosed was denied coverage for Applied Behavior Analysis (ABA) therapy by both Aetna and Blue Cross and Blue Shield.   Both insurance companies stated that autism was a “nervous mental condition” that they would not cover.  She stated that in addition to Austin, she has three other children, but knew that she and her husband had to find a way to help Austin get ABA therapy.   She said four years after his initial diagnosis an ABA consultant opened an office in their area and Austin began treatment.  At that time, they also began to accumulate the mountain of debt that they have incurred  for his treatment.  Ms. Pope stated that up until the day they took Austin to his first appointment he had not spoken a word.  After one hour with the therapist he spoke his first words.  He began a 35 hour per week program, and in two months he recognized shapes, letters, words and spoke his first sentence.  His therapy has continued for seven years and he can now read, do math and is functioning at a 5th grade level.  She stated that his accomplishments are due to the ABA therapy he has received.  She stated that Kentucky must rise to the challenge to make sure that all autistic children can receive ABA therapy.


Lorri Unumb, Senior Policy Analyst, General Counsel for Autism Speaks South Carolina, and a parent of an 8 year old son with autism addressed the committee. She stated that autism is a medical condition, brought on through no fault of family.   She stated that autism is actually an imprecise term and that some people use it interchangeably with “autism spectrum disorder”(ASD) and others use it to mean one of the ASDs. In fact, there are three distinct diagnoses within the family of autism spectrum disorders. The umbrella diagnostic category is called pervasive developmental disorder. Within that umbrella category are 3 conditions known as ASDs: Autistic Disorder (or “classic autism”), Asperger’s Syndrome, and Pervasive Development Disorder-Not Otherwise Specified (PDD-NOS).


She stated that across the spectrum, people vary greatly in terms of type and severity of deficits.  Interestingly, ASD’s are 4 times more common in boys than in girls. Although there is no known cure for autism, it can be treated so that the symptoms are not disabling.  A non-verbal child can gain the ability to communicate, and a non-social child can gain interaction skills. She stated that while those affected are not cured, they can overcome the disabling aspects of the condition. The most commonly-prescribed treatment protocol involves a therapy called “Applied Behavior Analysis,” or ABA. This is a therapy that has been used for many decades to treat autism, and yet the insurance industry continues to deny coverage for ABA therapy, often on the basis that it is “experimental.” According to Unumb that self-serving conclusion is simply not supported by the science, the Surgeon General, the National Research Council, and the American Association of Pediatrics (AAP) all have endorsed ABA.  Studies show that if ABA therapy is administered intensively and by properly-trained therapists, approximately half of the patients treated will “overcome” their autistic characteristics to such an extent that they can enter 1st grade indistinguishable from their peers, and the other half make significant gains as well,  such that they need less support for the rest of their lives.  She stated that ABA must be administered intensively, often 40 hours per week and this becomes very expensive.  She stated that her own son’s autism is very severe, and his therapy has cost $75,000 out-of-pocket per year. She said that because of this extraordinary medical expense she and her husband have been audited on their taxes three times.  She said that most children don’t require this much therapy, but the truly severe children do. She stated that fortunately, she and her husband are blessed with good jobs, and are able to sacrifice to afford the therapy for their son. She asked, how many Kentucky families have that kind of money to sacrifice, even half that much?  She stated that many autistic children are going untreated and it is sad that in the USA, we know of a treatment that works, and yet, we have children who cannot get the treatment they need because their parents are not wealthy. And it is not only sad, it is unfair, given that these families are paying premiums every month to cover their children.  These are families who are doing the right thing, by buying insurance for their families to insure against exactly this kind of unforeseen and unprovoked medical disaster. She stated that a 2006 study from the Harvard School of Public Health found that if a child with autism is not properly treated, the societal cost for that one child over their lifetime is $3.2 million dollars.  In addition, a 1998 study for the state of Pennsylvania projected an actual cost savings to the state of over a million dollars per child.  She said, applying the math, of the 1 in 150 Kentucky children diagnosed, and only a few getting treatment, when you multiply each remaining child by over a million dollars that will be how much Kentucky taxpayers will pay if the children do not get treatment they need. She urged the members that Kentucky cannot handle this expense in its budget.  She stated that just 15 years ago, the prevalence rate of autism was 2-5 per 10,000 and today it is 1 in 150.  Scientists don’t know the reason for the increase, but we all understand the ramifications. She stated that there is a huge autism tsunami coming, and it is going to cost the state an extraordinary amount of money in special education and adult care if the current generation of autistic children do not get the treatment they need. It is her opinion that without private insurance playing its part, the treatment is simply not going to happen.  Faced with this reality, other states, 13 to be specific, now require insurers to play their part.  Twelve states have passed legislation, in the past 2 years:


South Carolina (2007), Arizona (2008), New Mexico (2009), Texas (2007), Louisiana (2008), Montana (2009), Pennsylvania (2008), Nevada (2009), Florida (2008),

 Colorado (2009), Illinois (2008), and Connecticut (pending signature).


She stated that Indiana passed legislation 8 years ago in 2001, the same year the Attorney General in Minnesota entered into a settlement agreement with that state’s major insurer (Blue Cross and Blue Shield) to require coverage for autism, including coverage of Applied Behavior Analysis therapy. She stated that many other states are considering similar legislation.


She stated that one of the reasons she wanted to speak to the committee today was because she worked on the legislation in South Carolina that started the recent movement toward coverage, and has seen it successfully implemented in South Carolina and other states.  Children who have never before been able to receive treatment are making remarkable progress.  Providers have joined adequate networks of participating providers and have negotiated satisfactory reimbursement rates.  Despite the doomsday predictions from opponents that she has heard in state after state, none of South Carolina’s insurers have left the state, and no businesses have exited the state because of this benefit.  She stated that the impact on premiums has been negligible.  In Indiana, the Department of Insurance called the financial impact “unmeasurable” even years after the coverage became effective.  The insurance industry’s own association, the Council for Affordable Health Insurance, estimates that mandated autism benefits increase premium costs by less than a 1%. She said that an independent cost analysis prepared specifically for Kentucky also arrived at less than 1%. She stated that some opponents argue an autism mandate will increase premiums 2-3%, and 5,500 people will lose insurance for every 1% that premiums increase. She urged that before members accept that information, please diligently investigate the opponent’s facts regarding the prediction of a devastating premium increase.  Insurance companies in Indiana and Minnesota have been tracking this data for years, and they know exactly how much it costs to fully cover autism.  Furthermore, in states where an autism mandate has passed, the overall impact on the economy has been positive, particularly in terms of job creation.  Thousands of people have been trained and are now working full-time as therapists with children with autism.


Stacy Trinkle, Physician/Parent, stated that she sees 25-30 patients per day in her practice, and of those 25-30 patients, 2-3 are autistic patients.  She stated she also tries to see one new autistic patient per day.  She stated that autistic children are very treatable, and with early diagnosis and intense ABA therapy, autistic children can be functioning members of society.  She stated that she is the mother of 13 year old autistic twin boys.  Her sons have had intense ABA treatment, and at age 4 they were receiving 25 hours per week.  Now, at age 13, they are entering the 6th grade and will be taking standardized tests this year.  They are also involved in Boy Scouts and attend summer camp.  She stated they are able to function unassisted in school and manage everyday tasks on their own.  Her sons still receive 6-8 hours of ABA therapy per week.  She stated that her husband is a teacher and carries the family health insurance, they live in southern Indiana and her practice is in Louisville.  She stated her children have had access to their therapy because of Indiana’s health insurance mandate granting coverage for autism and ABA therapy.


Representative Steve Riggs asked if ABA therapy is beneficial to someone with Asperger’s Syndrome and Pervasive Developmental Disorder (PDD).  He also stated that he supports this legislation.


Ms. Unumb stated that ABA therapy is very beneficial to both disorders.


Representative Mike Denham asked if the increase in the number of autism cases has been tied to genetics in any research studies.  He also asked if the proposed Health Care Reform Plan includes treatment of autism.


Ms. Unumb stated that the cause has not been determined.  She stated that one of the reform bills was amended to include behavioral health treatment.


Representative Brent Housman asked how many autistic children are in Kentucky.  He also asked what the fiscal impact has been in Indiana and Minnesota.


Dr. Stacy Trinkle stated that in Kentucky 1 in 250 children are diagnosed with autism.  She said that autism exceeds diabetes and cancer diagnoses.


Ms. Unumb stated that the insurance companies have not shared the fiscal impact data.


Senator Ray Jones stated that he has pre-filed a bill in the Senate for the 2010 Regular Session that addresses insurance coverage for autism treatment.  It is the same bill he filed in the 2009 Regular Session (Senate Bill 74).  He stated that the Autism Treatment Center at the Highlands Medical Facility was recently opened in Eastern Kentucky.  He said that he realizes his bill calls for a health mandate, but, sometimes the legislature has to mandate coverage to do the right thing.  He feels that Kentucky needs to step up and help autistic children and their families.  He stated that the fiscal note that was attached to Senate Bill 74 in the 2009 Regular Session indicated a $1.20 per month increase in insurance premiums.


Representative Bob Damron asked if this would be applied to all insurance products or just group plans.


Senator Jones stated it would apply to all groups.


Representative Greg Stumbo, Speaker of the House, stated that the Autism Treatment Center in Eastern Kentucky partners with the Cleveland Clinic.  He said this is a very worthy cause and urged the committee to give serious consideration to this legislation in the upcoming 2010 Regular Session.


Melodie Shrader, Kentucky Association of Health Plans, stated she worked with the groups involved during the 2009 Regular Session and will be available to do so for the 2010 Regular Session and hopes that a solution will be worked out for Kentucky.


The minutes from the November 2008, meeting were approved.


Meeting adjourned.