Genomics & insurance

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The Economist has a long piece about the impact that ubiquitous genetic testing will have on health insurance, especially in the United States. This part is crucial:

…If that is the consequence, then other ways of paying will have to be devised. Carol McCall of Humana, a big American health-care provider, thinks a move toward some sort of compulsory, universal coverage is inevitable, even in America. That need not necessarily mean a scheme financed mainly out of taxation, of the sort found in most other rich countries. However, social outrage over a rising class of uninsurables may make the government an insurer of last resort-particularly, as Dr Cecchetti observes, when some rich and powerful people discover that they, too, are not immune from the genetic lottery. He reckons testing will lead to individuals receiving a health score akin to today’s personal credit score. Those whose files come on screen to the accompaniment of flashing red lights will not find it easy to obtain cover for much less than the cost of paying for their treatment themselves.

Actually I think the key here is family. Just as surveys have found that having a friend or family member who is gay tends to change how one perceives attitudes toward gay rights, my own hunch is that genetic predispositions found among the circle of family and friends will tend have more of an impact than we might think. The distribution of mutational load being what it is it seems likely that uninsurables will be found across all classes and socioeconomic clusters, as opposed to the current population of uninsured which is disproportionately young, poor or marginalized in some way.

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  1. “will not find it easy to obtain cover for much less than the cost of paying for their treatment themselves.” 
     
    Aye, there’s the rub.  
     
    Testing for those at higher risk is one thing when done by private insurers and quite another as part of either mandatory and/or state-financed health schemes. The principal difference lies in the fact that the offered product has to meet two criteria: it has to offer benefits attractive to its potential consumers and its sale must be profitable for the company. If its price be “too high” it won’t sell sufficiently to generate profit; should the risk be so low as to generate inordinate profit, competition will tend to eliminate that as well. No particular problem exists in these cases. 
     
    But if coverage itself is mandatory (as it is in the field of auto liability insurance in most states), the activity is, in effect, licensed at the price of the insurance. If one can’t find an insurance policy providing state-mandated minimum coverage at a price one is prepared to pay, one may legally be licensed to drive but cannot own a vehicle with which to do so. The question becomes: if you can’t (or won’t) pay the cost of the health-care insurance coverage applicable to your risk category, why should the authority mandating your coverage (in order to avoid the impact of your anomalously risky condition on the cost of their provided health-care services) permit you to continue in such activity as is analogous to driving your car (which, in this case, is living)?  
     
    Some may think I’m kidding or drawing a far-fetched parallel. I’m not. Others may believe that I’m paranoid or at least a bit on the nutty side to make the suggestion (preceding); either of those may be the case but a couple points ought to be considered. 
     
    In this country, nearly every state has “helmet laws,” not only for licensed motorcycle drivers 
    (and passengers) but for bicyclists as well. Seat belts have been federally mandated at the point of manufacture and failure to use them made punishable by states. These laws exist not so that you may protect yourself from injury but so that society may protect its variously-obtained healthcare funds from such costs as your injury probability poses to their integrity. You are a ward of the state, a potential charity case just walking around waiting to happen. Can’t have that, can we? I’ve been told by people “from the Dutch” that there’s a widespread perception that (involuntary) euthanasia is somewhat commonplace. That’s one way to cut down future expenses, isn’t it? And even if such rumors had no basis in truth whatsoever, they might just have some of the same effect as if they were true: when people over 50 become reluctant to go to a hospital for any but the direst conditions–well, that tends to cut down on the costs, too, doesn’t it? Works even better if they die because they didn’t go to the hospital. So many benefits.  
     
    As a matter of fact, many of the conditions that might eventuate to increased medical costs somewhat later in life may be and will be detected (and priced) at birth or even before. It is not likely to escape notice that “high-risk babies” are not only those with HIV and narcotic addiction transmitted by their mothers. “Offing” the indigent may be entirely practical and even the only way to maintain health (of the funds) but it’s not politically correct–at least at present. But if we work into it by differential risk pricing of the coverage for all–we can “back into” it more acceptably.  
     
    Some may get the idea that I’m against health-care insurance. I’m not. Or that I’m against the type of tests that serve to quantify and price the risks of future eventualities. Wrong again. 
    What I’m against is the idea that any mandatory system can work better, overall, than leaving such matters entirely to the discretion of the involved individuals. Socialism creates more of the problems it was instituted to address–always. Each participant in such a system is provided with an built-in incentive to maximize his expectation with respect to other participants. Regardless of whether risks are rated and differentially priced–or not, all face the situation that their own behavior (with regard to risk) is of less importance because others will shoulder much of the cost. Thus, those dismayed by the prospect of carrying the burden for others’ partially self-inflicted misfortunes (and that includes, potentially, everybody) clamor for laws requiring such others to behave in certain prescribed ways–laws backed up by voluminous administrative bureaucracy (and penalties). The prospect is not one of human health, happiness, and satisfaction but, rather, one of whatever the appropriate authorities (and their intellectual and political henchmen) regard as judicious, efficient herd management.

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