Health Care Issues

Insurance And Genetic Privacy

Congress and state lawmakers are busily debating whether the results of genetic testing of individuals should be made available to insurance companies. Genetic screening can reveal whether an individual's genetic code puts him or her at high risk for certain diseases, such as cancer.

  • Proposed laws would prohibit insurance companies, health maintenance organizations and employers from requiring genetic screening or using genetic information in deciding whom to insure, how much to charge and what diseases to cover.

  • Last year, state lawmakers introduced 153 bills on genetic privacy.

  • So far, 26 states have adopted strong confidentiality laws.

Critics of such laws argue that both sides to a transaction are entitled to as much information as possible.

Insurance purchasers, having been tested and informed of their risk factors, could use that information to personal advantage -- stocking up on particular types of insurance coverage.

People at high risk might invest in multimillion dollar life insurance policies, knowing their heirs would have a good chance of collecting. Some critics see this as a form of insider trading. They argue that if insurers cover people who buy extra coverage and incur disproportionately higher expenses, but don't pay higher premiums because their higher risks aren't known, insurers will make up the difference by raising rates for all.

Source: David Gollaher (California Healthcare Institute), "The Paradox of Genetic Privacy," New York Times, January 7, 1998.

Genetic Testing And Long Term Care Insurance

The cost and availability of long-term care insurance may depend on whether state legislatures allow insurance providers unrestricted access to and use of genetic information on the aging population, say observers. If insurers are allowed to require an individual to undergo genetic testing as a condition of coverage, discrimination is likely.

In Texas alone, for example, there are currently over 265,000 individuals with Alzheimer's -- for which there is a genetic predisposition -- and by the mid-21st century, this number is expected to more than double.

  • At present, the majority of states do not regulate the use of genetic information in the issuance of long-term care insurance.

  • Moreover, six states expressly or implicitly allow the use of such information -- with Texas, for example, specifically exempting long-term care insurance from a general prohibition on the use of genetic testing to deny group health benefits.

  • Only two states, Colorado and Vermont, specifically prohibit the use of genetic test information, and a handful of states are considering similar legislation.

In the past, Medicaid paid for approximately 50 percent of long-term care costs, and individual personal assets paid for a little over 30 percent. But Congress is expected to shift more costs to the private sector, either in the form of personal assets or long-term care insurance.

Source: Elaine A. Lisko, "Genetic Information and Long-Term Care Insurance," Health Law News, September 1998, Health Law and Policy Institute, University of Houston Law Center, Houston, Texas 77204, (713) 743-2101.

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