OSEEGIB Memorandum on Nick's Law

To:	Joe McCoy, CPA Dana Webb
From:	Trey Sarsfield, ASA, MAAA
cc:	Kelly Wilson, CPA Frank Wilson, CPA Timothy Nimmer, FSA, MAAA Justin Kindy, FSA, MAAA Colleen Thompson, FSA, MAAA Jennifer Becker
Date:	January 20, 2009
Re:	SB 1

Dear Mr. McCoy and Ms. Webb,

Per your request, Aon reviewed the proposed Senate Bill 1, titled "Insurance - Create Nick's Law," related to an expansion of autism coverage in the State of Oklahoma. We relied on information from the legislature's independent actuarial study, including the findings that autism incidence in Oklahoma is approximately 1 in 500 children under the age of 18, and that the annual cost of implementing coverage in accordance with this bill is a minimum of $18,000 per autistic child, with a potential cost of $40,000 per autistic child. Based on our calculations, the impact to claims will be an increase of 1% or less. Based on Aon's recent projection of $755 million for calendar year 2009 Medical and Prescription Drug claims, the estimated dollar impact is not expected to exceed $7.5 million. The minimum impact Aon would be comfortable using for pricing and budget setting is one-third of 1%, or approximately $2.5 million. Please note that the legislation could result in lower costs than this figure; we simply feel this is the minimum estimate we can provide as responsible actuaries and stewards of OSEEGIB's health plans.

If you need further information or have any questions, please do not hesitate to contact us.

Thanks,

Leonard (Trey) Sarsfield III, ASA, MAAA

Assistant Vice President

Aon Consulting

4100 E. Mississippi Ave, Suite 1500

Denver, CO 80246

Ph: 303-782-3328