NCPA - National Center for Policy Analysis

Should Insurance Companies be Privy to Genetic Testing Data?

December 20, 2002

The growing use of genetic testing is being used as an argument for universal health insurance. In the years ahead, genetic testing will become gradually more pervasive and our knowledge of the risks of disease associated with those tests will become increasingly refined. Some argue this will destroy private health insurance as we know it, and the only remedy is universal health insurance coverage.

  • If insurance companies are barred from using the results of genetic tests to set rates or determine the insurability of individuals, there is the potential for financial disaster for the companies as at-risk individuals stock up on cheap policies and demand compensation when they fall ill later.
  • Being kept in the dark may well encourage companies to raise rates for everyone in order to protect themselves.
  • If insurers are allowed access to testing data, many more individuals will be uncovered because they will be deemed too high-risk to warrant insurance at affordable prices.

Some medical practitioners are suggesting the answer to this quandary may lie in universal insurance coverage.

They argue that universal coverage would provide health insurance to every person, from birth to death -- with rates based on the average risk of the national pool.

Some would like to see the government provide the insurance, or allow multiple companies to provide policies -- while requiring that every insurance company use the same actuarial data for determining for determining policy pricing. One option would be for the government to provide tax credits or other incentives for low-income individuals and children.

Free-market advocates argue there is no single risk pool for insurance, and risk- adjusted insurance can be made available to cover genetic conditions on an individual basis.

Source: William R. Brody (Johns Hopkins University), "A Brave New Insurance," Wall Street Journal, December 20, 2002.


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