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Genetic screening and insurance

By streetlawyer in MLP
Wed Jan 03, 2001 at 10:54:40 AM EST
Tags: Technology (all tags)
Technology

Here's a rather good article from the Financial Times about the possible effects of genetic screening on the insurance industry. If I were to fault it, I'd say it concentrates a bit too much on the private information problem (where only the policyholder has the information), which is fairly obvious, and not enough on the symmetrical information problem. This isn't a fault in the article, which is a commentary on a recent piece of academic work, but the most interesting implication is in a throwaway line toward the end; "Many health conditions would therefore become uninsurable" (if genetic screening were widely implemented). Of course, if genetic screening became as widespread and technically advanced as we occasionally discuss the possibility on this site, we might very well have the problem that all health conditions would be uninsurable; ie the market would collapse, which would be a Bad Thing. Read and enjoy.


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o Here's a rather good article
o Also by streetlawyer


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Genetic screening and insurance | 6 comments (2 topical, 4 editorial, 0 hidden)
Argument for national health (5.00 / 4) (#5)
by Paul Johnson on Wed Jan 03, 2001 at 08:23:55 AM EST

This article from The Economist looks at the same issue. At the end, almost as a throwaway, it comments that this issue may become a compelling argument for national health. The whole point of insurance is to pool risk, and risk equals uncertainty. As genetic screening becomes ever more accurate, so the uncertainty is decreased, and both individuals and their insurers can more accurately predict the cost of future healthcare.

This leads inevitably to a genetic underclass situation where people who show a long term predisposition to expensive diseases will be unable to insure against them or to pay for treatment if the disease develops.

Now consider the motivation of a couple planning a child. Their child might turn out to have some nasty genetics, but you never know.

In theory at this point they could buy life-time medical insurance for the unconceived child, but in practice this would be very expensive. They could pay in instalments, but it would be hard for insurers to enforce the contract against those who subsequently have genetic tests, find themselves in the clear, and decide to let the cover lapse. They would still owe money, but getting it out of them would be difficult. Also this scheme predicates an individuals entire health care for life on what their parents were willing and able to pay before they were born!

So for our putative prospective parents the idea of state health care for their child looks very attractive. The risk is shared, as in conventional insurance, but without the adverse selection problem because its compulsory.

In fact this problem is already with us in a small scale. Ask anyone with epilepsy about health insurance. You might be able to get it, but it will exclude anything related to the epilepsy. So every few months you wake up in Casualty owing them $5,000, and there is nothing you can do to stop this (short of permanently wearing a tee shirt telling people not to call an ambulance if you have a fit).

Genetic tests will bring this problem to a significant minority of the population, at which point they become a constituency that politicians will seek to please. Also there are those people planning families. I'd guess most people expect to have either children or grandchildren at some point in the future. If we start to see significant numbers of babies declared uninsureable for things that are likely to first beggar them and then kill them then pressure for national health systems will grow.

Of course I live in the UK, where we already enjoy the somewhat dubious benefits of the National Health Service (NHS). Its not exactly the best care money can buy, but it sure beats being uninsured.

Paul.
You are lost in a twisty maze of little standards, all different.

Change (none / 0) (#6)
by r0cket on Wed Jan 03, 2001 at 02:10:14 PM EST

As a corollary, if we get to the point that most diseases can be tested for and identified genetically, then it may be possible to treat the condition or eliminate the problem altogether. The ability to identify a bacterial infection leads to a corresponding ability to treat the condition. It is true that insurance companies will be too willing to use genetic information to screen prospective policyholders, but this information could (1) lead you to treat a condition you might not know you had, (2) take measures to lessen the effects of a condition or slow its development. Also, the insurance companies would most likely still be willing to insure you, they might just charge you more. Of course, if you test negative for all the conditions they happen to be looking for, you may get charged less. Genetic testing will certainly change the insurance industry, just as it will change the medical industry, but the change won't be all bad or all good.

Genetic screening and insurance | 6 comments (2 topical, 4 editorial, 0 hidden)
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