Tuesday, 21 October 2003

Banning genetic discrimination

Alex Tabarrok notes that the Senate has passed, 95-0, a bill that would make it illegal for employers to use a person’s genetic information in hiring or firing. That’s good.

But the bill would also make it illegal for insurance companies to use genetic testing to deny coverage or set premiums. As Alex points out, that’s bad. (I can’t tell from the story whether this applies only to health insurance, or if it applies to life insurance as well.) This can only exacerbate the problem of adverse selection, leading to higher insurance rates for everyone, and pricing more and more people out of the insurance market.

Like Alex and Tyler’s guest-blogger, Lloyd Cohen, I’m skeptical about Alex’s optimistic suggestion that the problem can be solved through “genetic insurance“, which one would purchase before taking a genetic test, and which would cover one’s raised premiums in case one had, e.g., a genetic predisposition toward heart disease. How could the genetic insurance provider be sure that the purchaser had not already taken the genetic test ahead of time, to determine whether it would be worthwhile to purchase the genetic insurance? Again, we have the problem of adverse selection.

Advances in genetic research hold out a great deal of promise for improved health care in the long run, but in the short run they will inevitably lead to a collapse of the insurance market (both life and health) for diseases that have a genetic component. Ultimately, I believe this will force us into a single-payer government-run health system, which can pool risk by making insurance mandatory. Unlike many other liberals, I’m not sure this is a good thing. But good or bad, it appears inevitable.

Update: corrected the permalink to Lloyd Cohen's post.