The goal of the legislature should be to improve educational options for Missourians. They could accomplish this with meaningful school choice legislation.

As I noted in my recent essay, “Public Dollars, Private Schools: Examining the Options in Missouri,” greater school choice would be a net positive for Missourians. School choice puts the power back into the hands of the parents and it can save taxpayers money.

This year, however, the topic of school choice was rarely discussed in the House or Senate halls. Few school choice bills were even proposed, and the ones that were rarely received much attention.

A bill that would have fixed many of the problems in the current inter-district school transfer law never even received a hearing in the House Education Committee. The bill would have made it possible for many students to escape failing schools.

A bill that would have made it possible for students to enroll in a virtual course from another district or charter school never made it out of either the House or the Senate.

Even a bill targeted at helping autistic children failed to gain traction for most of the legislative session. It was finally folded into a conference committee substitute at the 11th hour. If the governor signs Bryce’s Law, it will establish a small, targeted scholarship program for students with special needs on the autistic spectrum.

It took eight years of continually pushing for Bryce’s Law to be passed — a small, targeted school choice program.

So here is another riddle: When will the legislature realize that all students could benefit from increased educational options? That riddle is truly puzzling.

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What I do find shocking in the comments is that some people don’t seem to be even remotely familiar with how insurance is supposed to work. The best example comes from commenter bogie90:

And do you buy autism insurance before your child is born just in case they have autism? Who would do that? And the insurance companies aren’t going to cover after the fact, remember pre-existing conditions?

Yes, of course you buy it before the child is born in case they have autism. That’s what insurance is for: to protect you against tragic but unlikely outcomes. You buy fire insurance for your house just in case you have a fire. However, you can’t insure your house against fire once it has the pre-existing condition of being on fire. At that point, insurance is just dollar trading to repair the damage from the fire. This might be one of the big problems with the debate over health care: people do not actually know what health insurance is.

The post “You Keep Using That Word. I Do Not Think It Means What You Think It Means.” appeared first on Show-Me Institute.

There has been a lot of charged rhetoric on the topic of autism mandates, and I’m positive that its proponents have had the best of intentions. (In fact, I played softball last weekend with one of the sponsors of the bill, Sen. Eric Schmitt, and he seemed like a great guy.)

It’s important, though, to understand the economic mechanisms behind mandates. Insurance becomes prohibitively expensive if the government attempts to mandate coverage of everything that could happen to anyone. As I’ve mentioned before, high-deductible health savings accounts are one of the best ways to handle these sorts of issues; once the policy owner exceeds a certain deductible, their insurance can cover the cost of treatment. The high deductible helps to minimize costs by reducing the health care wedge between patient and doctor, as well as reserving insurance for its intended purpose: large, catastrophic costs. Market competition is a more effective way to bring health coverage to all children with autism and other conditions, and not just a select few.

(Also, a quick thanks to John Combest for linking to my op-ed in the Springfield News-Leader! My op-ed will also be available in the Sunday edition of the Joplin Globe.)

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Gov. Jay Nixon’s desk no doubt holds many bills with supporters eager to see them passed, although one of them will raise the cost of health insurance in Missouri when it is signed. The Autism Spectrum Disorder Coverage bill, H.B. 1311, requires state-regulated private health insurance companies — those that cover small and medium-sized businesses — to cover up to $40,000 annually for screenings and therapy for children with autism spectrum disorders. Although well-intentioned, this mandate will necessarily raise the cost of premiums for Missourians, making it more difficult for individuals and small businesses to keep their health insurance plans.

Autism is a problem in Missouri, and it is easy to be swept up by the heart-wrenching stories of families with autistic children. But there are many disorders and diseases that afflict people — children and adults alike — and mandated coverage of all or even most of these problems would make insurance prohibitively expensive for everyone, especially for those who have diseases that are not given state protection.

A mandate of any amount increases health insurance costs, and this bill’s substantial commitment would assuredly have a noticeable effect. Small businesses are particularly cost-sensitive, and the autism bill will increase the cost of doing business in Missouri — although estimates of how much costs would increase vary, depending on who is doing the calculation. This bill would exempt small businesses if the provisions demonstrably raised their premiums by more than 2.5 percent, but any increase would likely price some marginal number of businesses out of the insurance market, forcing them either to cut coverage or reduce hiring. At the same time, these costs bring only a relatively small gain for Missouri families; an independent report estimated that the bill would only help up to 350 families.

The bill also raises the cost of autism therapy by increasing licensing requirements. It establishes a board to certify applied behavior analysts, the professionals who administer the type of expensive therapy that the bill covers. This regulation will add an extra barrier to entry in becoming an analyst, reducing competition in the field. For families not covered under the mandate, this will raise their therapy costs.

State mandates raise health insurance costs across the board, and decrease people’s access to affordable coverage. In the long run, the most effective solution for families with autistic children — or any other disorder — is for officials to open the insurance market to further competition, giving providers a practical economic incentive to cater to niche health care markets. Despite the good intentions of those aiming to help some families with autistic children by supporting this insurance mandate, it will simultaneously hurt other Missourians who could face significant cost increases or even the potential loss of their own health insurance coverage.

Caitlin Hartsell is a research assistant with the Show-Me Institute and a graduate student in public health at Washington University.

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The problem with free market, anti-regulation fundamentalists is that their arguments lead to despicable results (witness Rand Paul’s opposition to integrated lunch counters). A prime example shows up on the Missouri Record site, where grad student Caitlin Hartsell argues that if we increase costs to insurance companies by making them pay for autism spectrum disorders, those insurers might increase rates. (Characteristic of free-market extremists, she doesn’t provide numbers, or consider the possibility that the costs could be covered by reducing out-of-control executive compensation packages).

If you have a strong stomach or sense of humor, go read her obsequious offering to her Show-Me Institute bosses, and substitute any malady whatsoever as the subject. Try breast cancer or broken limbs, and you can have an argument in favor of freeing our health insurance companies from the burden of having to pay for, umm, health claims.

Where to begin? I never argued that insurance companies shouldn’t pay for claims; I argued that creating mandates is not the solution.

Competition needs to be increased in the insurance market, thus giving insurance companies a strong incentive to cater to people by providing coverage for things like autism therapy. A better solution than a mandate would be to increase competition by breaking the tie between someone’s employment and their insurance, by giving individuals the same tax breaks for insurance policy purchases that employers receive. This would give people more stability, because they could carry their insurance policies throughout their lives, and through uncertain economic times. If the tax break were offered to individuals rather than just employers, it would also reduce the incentive for them to offer “Cadillac” health plans that inevitably trade a portion of employees’ monetary compensation for expansive coverage that doesn’t meet everyone’s needs or budget requirements.

Unfortunately, the free-market argument is far too often misunderstood, because it focuses on the “unseen” as opposed to the very visible “seen” of children with autism. The author of that blog entry and I may very well hope for the same outcomes, but we disagree on the best way to achieve them. I want very much for children with autism to receive the necessary therapy. I also want children with any number of diseases to obtain proper care and coverage. By subjecting the market to competitive forces, people would have an increased ability to choose health insurance plans that fit their unique needs.

Statistics about the increase are available, but they are disparate, and determining the relevant figures depends on which side of the debate you ask. It will also depend on how regulators choose to interpret the provisions. But when costs increase, there will be people at the margin who are affected. Those most affected are the people whose illnesses or conditions aren’t covered by a mandate — their insurance costs are higher, but they do not receive any benefit.

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Beyond travel expenses, though, the signing of this bill will be costly for Missouri. I’ve written before about why I think an autism mandate is bad policy for Missouri. The bill may be a huge gain for the 300 to 350 families that will be helped by the mandate, but the rest of Missouri will pay for it in higher insurance costs and foregone jobs.

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This morning, I received an email message from a group that supports the autism bill urging its supporters to contact the House speaker, who they believed had been preventing the bill from reaching conference for a final vote. The email mentions that the speaker’s family is involved with the Ozark Center for Autism in Joplin, and questions how he can support causes that help autism spectrum people, yet also oppose the bill.

There is a disconnect in that logic. Opposing the insurance mandate does not indicate a lack of caring about autistic children and their families. Instead, it may follow from a recognition that government mandates necessarily increase health insurance costs for everyone. This hurts the families and children who suffer from conditions that are not state-protected. It also hurts individuals who can no longer afford their insurance premiums because increased premium costs have priced some marginal number of them out of the market. Opposing the bill demonstrates an understanding that the proposed legislation has effects other than the immediately foreseeable subsidy for autistic children, but also the unseen effects for individuals who have not been granted the protection of a similar state mandate.

This example clearly demarcates the differing approaches taken by competing political ideologies. The Ozark Center for Autism is a private charity that specializes in providing the applied behavior analysis therapy that the mandate seeks to cover. Supporting this group is an active measure to help autism-spectrum children without creating a government mandate. Supporting the activities of a private charity does not increase the costs of health insurance for other individuals.

Government mandates, on the other hand, raise health care costs for the rest of the population — even when those mandates are targeted to disabilities or disorders that we particularly hope will be supported. It would be prohibitively expensive to mandate coverage of every potential health problem, but increased competition in health insurance markets would allow families to choose the coverage that best suits them. Individuals who feel strongly about helping those who are afflicted with a certain condition can donate to a private charity that provides services to assist those who can’t afford treatments on their own. Involving the government is not the only solution to such problems, nor the most effective one.

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S.B. 618 would require insurance plans to cover up to $55,000 annually for autism diagnosis and treatment for children up to the age of 21. A mandate of any amount increases health insurance costs, and the bill’s substantial commitment would assuredly have a noticeable effect. Its proponents argue that it would increase the price of health care premiums by less than 1 percent, while insurers believe it could raise premiums up to 3 or 4 percent. Although the bill would exclude small businesses if it raised their premiums by more than 5 percent, any increase would necessarily price some marginal number of people and companies out of the insurance market, forcing them to cut coverage or reduce hiring.

Autism is a problem in Missouri, and it is not difficult to be swept up by the heart-wrenching stories of families with autistic children. But there are many disorders and diseases that afflict people — children and adults alike — and mandated coverage of all or even most of these problems would make insurance prohibitively expensive. These kinds of mandated coverage makes insurance more expensive especially for those with diseases that are not given state protection.

It’s important to note that some forms of autism aid already exist. Although not as comprehensive as an insurance mandate, there are publicly and privately funded resources for Missouri children with autism spectrum disorders, including Medicaid waivers for families who would not otherwise qualify for assistance, and a nonprofit private school for children with severe autism.

A large part of the argument in favor of the mandate lies in the unpredictability of health insurance when it is attached to employment — a problem only exacerbated by the current economic climate — and the difficulties involved in obtaining a plan that covers autism. Instead of government-imposed mandates about coverage, families should be free to choose an insurance plan that best fits their needs. Politicians cannot know the optimal equilibrium point between price, risk, and security for any type of insurance coverage, let alone for autism, because that equilibrium will differ for everyone.

The bill in question adds a much-needed amendment allowing Missourians to purchase out-of-state insurance that does not mandate autism coverage, although Missouri already has a mechanism that would help all families find affordable health insurance. Health savings accounts (HSAs) allow policyholders to become consumers, giving them the power to choose an appropriate coverage level. HSAs are portable, and therefore less dependent on job stability that may not always be available in an uncertain economic climate. Both employers and employees can contribute pretax funds to HSAs, which can then be used toward paying most basic health expenses. With an HSA and an accompanying high-deductible plan, consumers can budget their health care expenditures more effectively than bureaucratic cost-cutting is able to do.

State mandates raise health insurance costs across the board, and decrease people’s access to affordable coverage. In the long run, the most effective solution for families with autistic children — or any other disorder — is to open the insurance market to further competition, giving them a practical economic incentive to cater to such niche markets. Small businesses — at any point, but especially during a recession — are extremely cost-sensitive to changes in premiums like the one that would assuredly occur following a large mandate on autism treatment and diagnosis. Although this insurance mandate aims to help families with autistic children, it would simultaneously hurt another group of Missourians who would face significant cost increases, or even the potential loss of their own health insurance coverage.

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About one in 100 children are diagnosed with some form of autism, studies have shown.

The bills’ sponsors, Sen. Scott Rupp, R-Wentzville, and Rep. Dwight Scharnhorst, R-St. Louis County, want to make sure families can get coverage for expensive therapy known as Applied Behavioral Analysis, which often involves 20 to 40 hours a week of one-on-one sessions with therapists.

As filed, the bills would require insurance policies to cover $72,000 a year in treatment for children and adults up to age 21.

There is absolutely nothing wrong with buying insurance to cover treatments for autism, but not everyone needs or wants this insurance, so they should not have to pay for it. For example, as I read the article, a family of four would be forced to continue paying for this insurance even if neither of their children showed any signs of autism. Not everyone requires the same kind of medical coverage, but by mandating that everyone buy similar high-end insurance policies, the only thing we ensure is higher prices for everyone.

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