The effect of the autism insurance mandate on healthcare utilization and costs

Background:  Despite the many existing cost projections, there is no study in the literature on the actual effects on insurance cost changes after the new autism insurance mandate, which requires that private insurers cover services for autism spectrum disorders (ASD). This study will fill this gap in the literature by studying the actual cost increases and changes in healthcare utilization resulting from this policy change, using data from a large private insurer.

Method:   Insurance claims data from 2006-2012 were obtained from the largest private insurer in Pennsylvania, whose state autism mandate was among the earliest enacted and has been an example for other states. Children with ASD were identified by diagnosis code. Costs were measured as average payments by the insurer.

Results:  Since the PA autism mandate went into effect on July 1, 2009, partial change was observed in 2009 with a full change seen in 2010. From 2008 to 2010, the prevalence of children with ASD increased by more than 20%. Average total costs per patient increased from $2916 in 2008 to $6343 in 2010. The cost increases were mainly from newly covered ASD outpatient services. The outpatient costs per child with ASD went from $853 and $1381 in 2008 and 2009, respectively, to $4138 in 2010, and stayed relatively stable after 2010.  The inpatient costs did not change much after the mandate, and were $563, $539 and $652 in 2008, 2010 and 2012 respectively. Prescription costs were also not sensitive to the mandate, with an average of $1500 in 2008 and $1666 in 2010.

PA’s autism mandate applies to large employer groups and the state children’s health insurance program (CHIP), and excludes small employers. By insurance type, the overall costs in 2010(2008) were $9337 ($2973), $5166 ($2738), $3498 ($2938), $1980 ($1750), $1562 ($1248) for large employer, self-employed, small employer, CHIP and individual groups respectively.  In 2008, outpatient costs were $600-1000 for all insurance types. In 2010, outpatient costs were $7406, $3135, $1580, $755 and $589 for large employer, self-ensured, small employer, CHIP and individual groups respectively. Similar cost differences by insurance type were seen in 2011 and 2012. The largest component of the increase was the newly covered community-based wrap-around services, which alone increased the costs from 2008 to 2010 by $6057 and $1770 for large employer and self-employed groups, respectively. In contrast, there was little difference across insurance types after the mandate for inpatient or pharmacy costs.

Conclusions: The treated prevalence of ASD in PA increased after the mandate. Average costs and healthcare utilization increased immediately after the mandate and then became stable over time. The cost increase was mainly due to newly covered outpatient services. Covered large employer groups had the biggest cost increase, whereas exempted small employers experienced little increase. Some self-insured groups may have voluntarily covered new ASD services, leading to a moderate cost increase. Further research is needed to explore why children in the PA CHIP program with ASD insurance coverage showed little increase in service use after the mandate.