When Increases in Coverage Increase Out-of-Pocket Spending—The Case of Autism Insurance Mandates
Families spend thousands of dollars per year on treatments for their children’s autism spectrum disorder (ASD). Forty-eight states have passed laws that require insurers to cover the longstanding gaps in insurance coverage for ASD treatment to help alleviate the financial burdens that many families face. Mandates have already been linked to an increase in total spending on ASD-specific services, which prompts the question: do mandates increase out-of-pocket (OOP) spending as well? Higher levels of OOP spending after an expansion of insurance coverage seems counterintuitive but is possible, especially among those with severe ASD or with health plans with high cost sharing requirements. The change in OOP spending after mandates are introduced depends on the extent to which families of children with ASD respond to increased coverage with increased utilization.
To better understand the impact of mandates on families, our recent study estimated the effects of mandates on OOP spending and the share of total spending paid OOP using a rich commercial claims dataset with a sample of over 100,000 children with ASD across all 50 states. Using a difference-in-differences approach that compared children who were subject to mandates to children who were not, we found that mandates increased OOP spending by an average of $35 per month. However, mandates also decreased the share of monthly spending paid OOP for ASD-specific services by 4 percentage points on average.
Mandates have been shown to have differential effects based on the extent of a child’s service utilization, so focusing on the average effect can be misleading. We therefore performed subsample analyses by calculating quintiles based on total spending and found that our results were largely driven by families in the highest-spending quintile. Thus, it appears that mandates confer some financial protection by shifting health care spending for ASD treatments from families onto their insurer. But, even in the context of this shift, families in the highest-spending quintile still paid over $200 per month on average. To assist families with high levels of OOP spending, payers and providers should do a better job of ensuring that services for children with ASD are both appropriate and evidence-based.
These results suggest that mandates have larger effects for children with higher service needs and, potentially, more severe ASD. But these results could also be driven by differences in access to care rather than differences in clinical severity. For instance, low-spending families may reside in areas with few ASD providers or have uncertainty about which ASD treatments mandates cover.
Many families of children with ASD report using services that are paid for entirely OOP, and an important limitation of our study is that we only observed services paid for through insurance. Therefore, we are almost certainly underestimating the true costs of care. Nonetheless, these results shed light on the unique experiences that children with ASD and their families face while navigating health care. Our finding that OOP spending increased after mandates were implemented serves as a reminder that policies aiming to expand insurance coverage may not alleviate financial burdens completely. Furthermore, our finding that the effects of mandates were largely driven by high-spending families shows that policies are rarely one-size-fits-all, especially when they target clinically heterogeneous conditions like ASD.
The article, "Insurance Mandates and Out-of-Pocket Spending for Children With Autism Spectrum Disorder," appears in the December 2018 issue of Pediatrics. It was written by Molly K. Candon, Colleen L. Barry, Steven C. Marcus, Andrew J. Epstein, Alene Kennedy-Hendricks, Ming Xie, and David S. Mandell.