Genetic Discrimination and the Future of Health Insurance
Have health insurance companies outlived their useful life?
The Genetic Information Nondiscrimination Act (GINA) is taking effect. The employment provisions are effective on November 21. The health coverage provisions began to apply on May 21, 2009, with group coverage required to comply with on the start of the plan or policy year following that date. As a Monday NYT story describes, the purpose of GINA is to prohibit discrimination in employment and health coverage on the basis of genetic condition. The Times cites examples of denial of coverage on genetic grounds; some additional “horror stories” are told of people denied coverage due to a genetic marker for a medical condition.
Genetic discrimination is widely regarded as an “unfair” basis on which to deny health coverage. As then-President George W. Bush explained in 2001:
Genetic discrimination is . . . unjustified — among other reasons, because it involves little more than medical speculation. A genetic predisposition toward cancer or heart disease does not mean the condition will develop. To deny employment or insurance to a healthy person based only on a predisposition violates our country’s belief in equal treatment and individual merit.
This assessment seems to match our general sense of fairness. But why is a genetic predisposition different from other predispositions for insurance underwriting purposes? Does hypertension mean that stroke or heart attack will develop? Does the occurrence of a heart attack mean that another will occur? Not necessarily, but both are statistically valid indicators of future health costs, as are some genetic predispositions. One person’s medical speculation is another’s actuarial probability. So why ban the use of genetic information, but not the use of preexisting illness? Or, for that matter, age and gender?
GINA passed overwhelmingly, but Congress has otherwise been slow to limit health-based underwriting. Part of the explanation for carving out genetic information is its novelty, and the fact that one’s DNA is never one’s “fault.” But manifestation of genetic conditions is also not one’s fault, and GINA has nothing to say about underwriting based on symptomatic genetic disease. Maybe a more powerful force behind GINA’s passage was researchers’ fear that genetic discrimination would drive test subjects away from genetic research. Dr. Francis Collins, then-Director of NIH’s National Human Research Genome Institute, testified to this concern:
[T]he science of genomic medicine is rocketing forward. But fear of genetic discrimination threatens to slow both the advance of such groundbreaking biomedical research and the integration of the fruits of that research into our nation’s health care.
So, is GINA’s incursion into health insurers’ common freedom to charge more for those likely to be sick an anomaly? It does seem to run afoul of what Donald Light, in 1992, wryly called the “inverse coverage rule”:
the inverse coverage law: the more people need coverage, the less coverage they are likely to get, or the more they are likely to pay for what they get.
Increasingly, Americans seem to have had it with business models premised on denying care to those most in need. A recent WSJ/NBC poll found that the most popular currently proposed reform provision “by a mile” was that forbidding exclusions for pre-existing medical conditions.
Here’s a modest proposal. It is time to end insurers’ use of risk selection. Insurers face steady erosion in their ability to risk-select as that practice increasingly rubs against our basic moral principles. In addition, health coverage is less and less like “insurance,” as routine care is covered, and as it is easier and easier for insurers and consumers alike to discern who is likely to need to draw down on the “insurance” pool. Insurers already do a great deal of their business, without bearing risk or using risk selection to generate income, administering self-funded plans for large employers (as ASOs or TPAs). It is time for government to bear the risk (which it increasingly does anyway), and for insurers to be set to tasks that add social value. They add value in their ability to form, maintain, and administer provider networks. Why should their profit or loss depend on their ability to identify and exclude the needy? Clearly health reform in 2009 won’t get us this far, but let’s start admitting it: exclusion from coverage and care on the basis of need for health care should not be a business model supported in America.
Posts from Health Reform Watch have been cited by media sources throughout the country, including The New York Times, Washington Post, L.A. Times, Kaiser Health News, The Health Care Blog, NPR's Planet Money Blog, Duke Univ. Med. Center News, American Health Line Alerts, BusinessWeek.com, Concurring Opinions, Balkinization, The New England Journal of Medicine, Harvard's Nieman Foundation for Journalism, Las Vegas Sun, Maggie Mahar, Ezra Klein, Tom Geoghegan, and the official homepage of the Office of the Democratic Majority Leader of the House of Representatives, Steny Hoyer.
