Jose Manuel Fernandez is an associate professor and chair of the economics department at the University of Louisville. His research focuses on illicit drug use, risky behaviors and children with disabilities. Jose is a member of the 2022 Tradeoffs Research Council.

According to the most recent CDC estimates, 1 in 44 children are diagnosed with autism spectrum disorder (ASD). Responding to this increase, many states have adopted health insurance mandates to help these children get access to therapies, which can improve educational outcomes. So what kind of impact have these mandates had?

In a recent study in the Journal of Health Economics, researchers Riley Acton, Scott Imberman and Michael Lovenheim dug into this question in Michigan by asking:

• Did more kids get diagnosed with ASD after the mandate?

• Did the mandate result in better educational outcomes?

• Did use of school-provided special education resources decrease among students who benefitted from the mandate?

Michigan enacted an autism insurance mandate in 2012, requiring private insurance companies to cover ASD therapies for kids through the age of 18. Medicaid only covers these therapies through age 6, so the authors compared outcomes for kids likely to be on Medicaid vs. private insurance, using free lunch eligibility as a proxy. The researchers did not find that the mandate increased the incidence of ASD among school aged children nor did it adversely affect educational outcomes — some standardized test scores were higher and others lower, but none of the changes were very large.

They did, however, find a lower use of special education resources among kids most likely to have benefited from the insurance mandate. After the mandate, the researchers saw a 6.4 percentage point reduction in placement in pull-out rooms or cognitive impairment programs and a 3.4 percentage point increase in placement in non-special education programs. This result suggests that having private insurance coverage for ASD therapies reduces the provision of similar services within the public school system. With an estimated cost of $17,000 per year to treat a student with ASD, moving these costs to private insurance could provide significant savings for cash-strapped public schools.

Policymakers should consider the potential for spillover effects of health care policies on education and other social programs. This study illustrates that better access to health care can reduce spending from other social programs, a phenomenon called “crowd out.” Of course, whether this is good or bad depends on which way of funding care is more effective, something this paper didn’t look at. But the authors’ finding that test scores did not get meaningfully worse after the mandate suggests providing more health care outside of school could save taxpayers money without harming students.