Genetic Testing and Insurance
It is common knowledge that many diseases have a genetic basis and that the presence of more and more disease-related genetic mutations can be detected with simple tests. Unfortunately, much of the American public believes that certain diseases are completely determined by one’s genes and that a positive genetic test means doom. In turn, they fear that insurers will use information of such seemingly great predictive value to deny coverage to, or make insurance much more expensive for, those with positive genetic tests. Some also believe that employers may use genetic test information to discriminate against employees who are at greater risk of becoming ill. This has led to calls for government to regulate access to such information in order to prevent insurance companies and employers from engaging in what some have called “genetic discrimination.”
Fortunately, it is not true that carrying a genetic mutation for a given disease is a guarantee that the disease will eventually arise. Most genetic mutations only increase the probability of developing the disease, and most such diseases can be prevented or treated once the carrier knows about the mutation. Furthermore, it is already illegal for most health insurers to discriminate against potential customers on the basis of genetic test information. Nevertheless, Members of Congress have introduced legislation to expand current laws that forbid health insurance providers from basing coverage or premium decisions on a customer’s genetic status, and to forbid group health insurers from charging all members of a group plan higher rates based on the genetics of one or more members. The legislation would also prohibit employers from discriminating against individuals on the basis of genetic information.
Despite public perceptions, however, there is no strong evidence that genetic discrimination is currently a widespread problem, or that it is likely to become so in the future. Numerous investigations into actual underwriting practices show that neither health nor life insurers currently engage in such practices. The few studies that purportedly document genetic discrimination have not been sound methodologically. They rely solely on patient self-reports with no follow-up to confirm that genetic discrimination actually occurred. And most such studies give a misleading impression by defining use of family medical history in underwriting decisions as a form of “genetic discrimination.” Ultimately, Dawn Allain, president of the National Society of Genetic Counselors, told The Wall Street Journal in 2004: “We haven’t seen any real cases of genetic discrimination.”
Of course, even though it is not occurring today, one might fear that genetic discrimination could become a genuine problem in the future, as scientists learn more about the genetic basis of many diseases. The economics of health insurance make it unlikely that those insurers will rely on genetic test information—at least for the foreseeable future. Most health insurance is provided by employers, and premiums for those plans are based on the experience of the insured group, not on the characteristics of any one member. In addition, health insurers tend to see a rapid turnover in enrollment, so trying to predict health problems that may or may not actually occur years into the future makes little sense.
Life insurers, on the other hand, could, one day, have an incentive to use genetic test information, because their customers typically buy their policies individually and tend to keep the same insurer their whole lives. When practical, insurers can reduce the uncertainty in expected payouts by gathering better information about their customers’ health risks. That helps policy holders because reducing such uncertainty lets the insurer reduce the financial cushion it needs to account for unknown high-cost customers within the insured group, leading to lower premiums.
Furthermore, even if life or health insurers were to find it practical to base underwriting decisions on genetic test results, the practice is unlikely to produce one class of genetically blessed and another class of genetically cursed individuals. Nearly all diseases with a genetic component can be prevented or treated with early detection, so widespread genetic testing is far more likely to result in improved health outcomes for most genetic diseases.
It is not even correct to assume that those genetically predisposed to some disease will have worse health outcomes when compared to the general population. In many cases, those armed with the knowledge that they are genetically predisposed to a given disease might well change their behaviors and control their environments sufficiently to gain a statistical edge over those not so genetically predisposed but who do not similarly alter their behavior. That could result in lower health or life insurance premiums. On the other hand, forbidding insurers from using genetic test results or other types of relevant information could restrict efficient underwriting and force all consumers to pay higher costs. Ultimately, arguments for increased government regulation of health and life insurers do not make economic or practical sense.