DNA and the Insurance Industry

DNA AND THE INSURANCE INDUSTRY….Amy Harmon writes in the New York Times today that patients often refuse to undergo genetic testing because they’re afraid that negative results will make it impossible to get health insurance:

“It’s pretty clear that the public is afraid of taking advantage of genetic testing,” said Dr. Francis S. Collins, director of the National Human Genome Research Institute at the National Institutes of Health. “If that continues, the future of medicine that we would all like to see happen stands the chance of being dead on arrival.”

….Insurers say they do not ask prospective customers about genetic test results, or require testing. “It’s an anecdotal fear,” said Mohit M. Ghose, a spokesman for America’s Health Insurance Plans, whose members provide benefits for 200 million Americans. “Our industry is not interested in any way, shape or form in discriminating based on a genetic marker.”

Still, a recent study by the Georgetown University Health Policy Institute found otherwise. In 7 of 92 underwriting decisions, insurance providers evaluating hypothetical applicants said they would deny coverage, charge more for premiums or exclude certain conditions from coverage based on genetic test results.

Of course insurance companies are interested in discriminating based on a genetic markers. That’s what insurance companies do: they evaluate risks and then offer pricing and coverage that are appropriate and profitable based on those risks. If they don’t do that, they aren’t being insurance companies.

It’s worth saying this over and over: insurance companies don’t discriminate because they’re evil. They do it because it’s what insurance companies do. It’s a core part of their business, and if they don’t do it they’ll go belly up.

This is the biggest reason for wanting to get private insurance companies (mostly) out of the healthcare business. If it were just a matter of their being corrupt or evil, that actually wouldn’t be so bad. We could figure out ways to regulate them into good behavior. But it’s harder than that. The kind of behavior that most of us want — comparable coverage for everyone under nondiscriminatory pricing rules — is flatly not something an insurance company can offer. If they do, they aren’t being an insurance company. And if they aren’t being an insurance company, then what good are they doing?

In this case the answer is: impeding progress. In other cases they’re merely adding huge amounts of overhead to the system. But positive benefits? Those are a little harder to make out.