Special Needs, Crushing Costs

Parents with disabled kids have some options but must also dig deep into their own pockets

Decked out in an authentic Florida Marlins jersey that fell to his knees, 7-year-old Adam Jones stood tall in the infield at Miami's Pro Player Stadium. At the signal, he threw the first pitch for the Apr. 25 game against the Atlanta Braves in honor of Autism Awareness Day. Adam, an avid Little League player, is autistic. He has come a long way from the days in 1999 when he didn't speak, made no eye contact, and wore a special helmet to protect him from his violent head-banging behavior. After years of extensive and costly therapies that still continue, Adam now attends a regular second-grade class. While his progress is priceless, it has come at a huge out-of-pocket cost to his family: About $150,000 since he was diagnosed at age 2. That does not include the $50,000 spent on therapies for Adam's brother, Jeffrey, 9, who has Asperger Syndrome, a high-functioning form of autism marked by deficiencies in social and communication skills. "Health insurance pays very little, and we have no retirement or college fund because everything goes into these kids' therapies," says Joni Jones, 44, a registered nurse. The boys have four other siblings, but neither she nor her husband, Larry, 42, a family law attorney in Toms River, N.J., hesitate to "make the investment now so we can increase the odds" that our sons will be productive members of society later, says Larry Jones.

The Joneses are hardly alone in needing to confront the problems of special-needs kids. More than 10% of U.S. households have offspring -- adult children included -- with special needs, according to the PACER Center, a Minneapolis-based advocacy group for families of children with disabilities (pacer.org). Those disabilities include autism, emotional and behavioral disorders such as attention deficit hyperactivity disorder (ADHD), and other learning problems such as dyslexia. Most everyone knows someone who is affected -- it could be your neighbor or the boy sitting next to your daughter in the first grade.


The numbers are skyrocketing. Approximately 6.5 million children ages 3 to 21 have been diagnosed with special needs, up nearly 40% in eight years, according to the U.S. Education Dept. Those figures don't include children under 3, who are being identified with greater frequency.

What's behind the increase? Psychologists say better screening techniques have helped to identify additional cases. Technological advances are also saving more premature babies, who often develop disabilities. There is, however, some misdiagnosis by uninformed doctors and teachers. "Learning disabled is our No. 1 area of growth," and it is inappropriately used as a catch-all diagnosis, says Troy Justesen, acting assistant secretary of Special Education & Rehabilitation Services for the Education Dept. "We are working very hard to place a stronger emphasis on early and better identification."

For society, the cost of treating and educating these children runs into the billions. Employers suffer from the lost productivity of workers who must attend to the needs of their affected children. For example, the indirect costs (employee productivity and work loss) and direct costs (therapies and medication) to a family with an ADHD child are 90% more than for those families with unaffected children, says a study reported in the December 2003 Journal of the American Academy of Child & Adolescent Psychiatry.

Health insurance companies have been inundated with claims from families of children with special needs. But the industry association America's Health Insurance Plans hasn't been able to quantify the rise in requests for reimbursement for kids' therapy services. Many claims get turned down.

States and local school districts also bear a huge financial burden. The federal government pays just 18% of the $50 billion spent annually on the expensive special-education services required under the Individuals with Disabilities Education Act (IDEA). IDEA requires that each child receive an "appropriate education." For children with special needs that may include additional support in the classroom, speech, occupational therapy, or psychotherapy to help them succeed in school. Many parents home school because they are either unaware of the options available under IDEA or couldn't get the necessary services.

Since the law was passed in 1975, there has been some debate about the percentage of special education costs that the federal government agreed to pay. Proponents argue that the feds promised to pick up 40% of the extra cost to educate these students. The Education Dept. claims the government is responsible for only some percentage "up to" 40%, not the total amount. "We haven't made the investments in the previous years that we should have been making," says the Education Dept.'s Justesen.

That leaves states and municipalities on the hook for the rest, the local portion of which must be funded by higher property taxes or cuts in other programs. "No one thought we'd be serving the number of children we do with the depth and breadth of services we provide," says Bruce Hunter, associate executive director of the American Association of School Administrators.

Connecticut's East Lyme School District, for example, received only 60% of the $900,000 it needed from the federal government for its 2003-04 special education program. To make up the $360,000 shortfall, the district instituted a hiring freeze, cut the third- and fourth-graders' music program, reduced transportation for extracurricular activities, and stopped purchasing new textbooks.

Some relief for the states and school districts may be in sight. Congress is now working on the reauthorization of IDEA. The bill, currently in conference, calls for the federal government to increase special education funding by $2 billion each year for the next seven years. That would bring federal funding to 40% by 2011. However, IDEA will still require annual appropriation approval from Congress. "It's still just promises in a tough budgetary environment," says AASA's Hunter. Just as Larry Jones pointed out, without investments in children with special needs while they're young -- when intervention is proven to be most effective -- the future costs to society in caring for them will be astronomical. If they aren't able to support themselves by the time they're adults, they'll become eligible for disability payments under Social Security just as the baby boomers are set to retire en masse.

While the cost to society is high, it can be crushing for the families of these children. Parents need to educate themselves about and use public resources, and then dig deep into their own pockets to fill in the gaps. Special schooling and therapies for autistic children run up to $60,000 a year, while costs for children with less debilitating problems can still top $20,000 annually. Unfortunately, there are limited "employer health insurance options for families of children with special needs to help meet the overwhelming cost of raising them," says Marko Mrkonich, an employment attorney with Littler Mendelson in Minneapolis. Little-known financial strategies and resources can help parents cope more effectively.

Parents of these special-needs kids often end up fighting battles on two fronts -- with their health insurers and their school districts. After Joni and Larry Jones got Adam's autism diagnosis in 1999 -- and before Jeffrey was diagnosed with ADHD in 2000 and Asperger in 2001 -- they began scouring the Internet and attending support groups and conferences sponsored by state autism organizations. "We wanted to make informed decisions so we could effectively use our financial resources," says Larry Jones, who, with his wife, earns $200,000 to $300,000 a year.

Part of their assessment included an in-depth analysis of their health insurance plans to understand what they would have to pay for and what would be reimbursed. "Often families don't know what their coverage is until they are denied a service," says Carolyn Allshouse, a health information expert at the PACER Center.


Through research they found that if Adam were to have any shot at a productive life, applied behavioral analysis (ABA) was their only option. It's an intensive and costly one-on-one therapy administered up to five hours a day, seven days a week at home. It works like this: A therapist chooses 8 to 10 simple tasks each day, such as "look at me," and "sit down, hands quiet." The therapist will have the child repeat each task up to 10 times each session. Once the child has mastered the task 90% of the time over three to five days, a new task is introduced. Often, positive reinforcement, such as treats, are used to motivate the child. Jeffrey received a modified form of ABA to help with his social issues. Additional treatment for both Adam and Jeffrey included speech, occupational, and nutritional therapy, and hearing therapies to help with auditory processing problems. Both boys also needed academic support with their school work.

Once the Joneses decided on the therapies, they assessed their financial situation. Money was tighter because Joni quit her nursing job in 1999 to focus on the two boys. To get started, they used a lot of their savings, made charges on their credit cards, and borrowed $100,000 from relatives. Family vacations and outings became almost nonexistent, and they quickly scrapped their hope of moving to a larger home.

Five years later, the Joneses are making progress. They recently went to a financial planner to talk about paying back their debt and saving for retirement because they think they can start putting something away for themselves. They have scaled back the ABA therapy for both boys and now get the school district to pay for most of the occupational and speech therapies. Joni has also gone back to work full-time as a private autism consultant, using what she learned on her own to help other families manage the maze of raising autistic children. Her Web site is autism-resources.net. But you won't find her or Larry in the office on Wednesday afternoons this time of year. Instead, they're rooting for Adam at his Little League games.

By Toddi Gutner

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