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Insurance and Genetic Testing

The Senate has passed legislation ostensibly banning discrimination on the basis of genetic testing results. I suppose that the devil will lie in wait in the details, as always, but I must confess to some degree of bafflement at Richard Spencer's reaction:

The fact is, genes affect susceptibility to disease, and genetic testing can help pinpoint just how and to what degree and thus help insurance companies design specific regimes for specific clients. Washington’s banning of testing simply means that we’ll all be paying higher premiums in order to account for the added risk companies bear due to their taking on certain patients who could easily have been put on different plans.

Reihan Salam had an interesting discussion of the slowly-emerging crisis of genetic testing and the business models of contemporary health-insurance outfits some months ago, though I cannot recall where, precisely; but since risk-sharing is the fundamental premise of insurance, well people paying somewhat more to subsidize the costs of caring for the unwell, as a hedge against uncertainty in their own lives, is just part of the package. We're no longer debating the whether, but rather the how; and the increasing precision of genetic testing augurs a future in which this no longer obtains, in which the genetically blessed pay for risk-management they will not need, while many cannot afford insurance because they are not so blessed, genetically-speaking. Many people will not be placed on different plans, so much as priced out of the market, period. The market rations services by means of the price mechanism, and many of the sick, and those with chronic conditions, will be excluded.

As I've suggested, this will defeat the rationale of insurance in principle, and increasingly in practice; let's say that this shift will constitute an ideal which increasing precision will enable us to approach. Now, as I've also suggested in numerous discussions, we're not about to go all Dickensian, abolishing all forms of social provision and solidarity (at least, I won't bet on it), and if the 'private' insurance industry prices large percentages of the population out of its services (and there is no way that genetic testing will not do this), pressures for political provision will mount, as they are presently, even in the absence of widespread anxiety over genetic testing. This legislation may be horridly crafted, for all I know; I might even wager on that. However, something like it may be a bulwark against the eventual imposition of socialized medicine, in this case an explicit dual system, such as exists in Britain: private physicians for the well-to-do and well, public clinics for the poor and ill.

Genetics cannot be banned; neither will the advance of the science be halted. However, neither can every human good, and every aspect of human fate, be subjected to the unmediated discipline of market mechanisms, as Karl Polanyi would say. The attempt to do so would not only cause enormous suffering, but would actually increase pressures for overtly socialistic measures, which will... cause suffering. Some goods are at least partly public, in other words, and this reality cannot be expunged. It is only the sick who need a physician, and not the healthy.

Comments (12)

The deadly combination of the market and genetic-testing will only strengthen the eugenics regime. The incentive to "make" healthy off-spring will only increase in light of financial pressure and social aspiration. The Abolition of Man quickens as we reduce ourselves to mere matter in need of, and open to "the promises of science." A nightmare beyond parody, but not resistance.

The usual case is as you describe: genetic testing would allow companies to raise rates for those affected with genetic disorders including, as the classic hot-button case, sickle-cell anemia. The poor person with some genetic flaw raising his risk for maliosis of the frobbinge would be unable to pay for his care.

But the other side of that coin is that a wealthy individual with a genetic problem will also be shielded; in effect, the vast numbers of the poor are made to subsidize the few rich people. And the likelihood of a rich person taking advantage of the insurance is much higher if he knows of his problem, the knowledge of which, being rich, he is all the more likely to have.

Just saying.

I've argued before that we use the word "insurance" multivocally, which badly distorts the discourse. Part of the reason genetic testing is controversial is because by providing greater information granularity it is detrimental to 'insurance' understood under one voice (that of providing low-cost health care to people who otherwise could not afford it) and yet beneficial to 'insurance' under other voices (that of providing on-average-more-expensive care but with protection from catastrophic loss, sometimes employing diagnostic/preventive measures). Another reason of course is because it involves discrimination based on physical characteristics, which offends modern liberal pieties.

Another reason of course is because it involves discrimination based on physical characteristics, which offends modern liberal pieties.

This, I gather, was an animating principle of the support for the legislation. I don't believe, though, that it is necessary to invoke liberal shibboleths in order to object to genetic testing as an actuarial principle.

The deadly combination of the market and genetic-testing will only strengthen the eugenics regime. The incentive to "make" healthy off-spring will only increase in light of financial pressure and social aspiration.

This is all too accurate, as indicated by the proliferation of prenatal genetic screening. During my wife's pregnancies, the physicians ordered 'routine' tests for Tay-Sachs, on the grounds that both my wife and myself are of Eastern European extraction; we were dazed and confused enough at the time (Why that test, as my wife has no Jewish ancestry, and the probability that I do is negligible?) that the significance of this testing did not register, but, in retrospect, the implications were as luminous as daylight and as dark as sin itself.

Without the advent of modern computing, much of the rate discrimination (non-pejorative sense) wouldn't be possible. In principle, insurance is about bringing together a class of people to bear an equal burden of their shared risk. In its most primitive form, a risk was either accepted into the pool or rejected. Adjustments were later allowed at underwriting time within certain limits. This is why in Internet debates, data is often cherry picked on health insurance costs between states and the claimed difference is due to so callled "regulations." The difference is always largely due to limits of what the difference between the quoted and underwritten premium can be. In some States, you can legally quote insurance at $150/month for a family but then when you go to sign the underwritten premium can be $1000/month.

In a country where the concept of solidarity is largely absent such as ours, people have pushed to make insurance more reflect "the actual"/personalized risk. As in Lake Wobegon, everyone in the U.S. is above average and will save money if they are personally assessed rather than being assessed in a pool. Such a system may in fact be better, but it is closer to swap than it is to insurance. And maybe everything from auto liability to health care should be a cash swap. It just isn't insurance. So yes, one can and should object to genetic testing being allowed in determining insurance premiums.

Another problem, to which the 'fine grained' phrase refers, is that if insurers were allowed to screen for genetic markers, they could make all insurance cheaper for everyone. though it would be less effective for those who popped positive for some problem.

Since I don't see the insurance industry as public property, I think that would be fine.

If insurance weren't available to those who tested positive for genetic or other more generically-heritable tendencies, or available only at a substantial cost, the care of these individuals would either a) be subsidized by the hospital networks, which would then compensate by increasing billing to insurance companies for all procedures; b) subsidized by tax incentives or other inducements to the insurance companies themselves, at obvious public expense; c) subsidized by direct social provision. In any one of these scenarios, the essential economic logic is the privatization of the profits to the insurance providers, by eliminating their responsibility for the higher risks, and the socialization of the costs, in the latter two cases, across the taxpaying public at-large, in the former, by inefficiently mediating the socialization through two systems instead of one.

Privatization of profits/socialization of costs is a dominant motif of political economy in our times, from immigration to the war, and it is thoroughly disreputable and corrupting. In the present case, it will be the result of the attempt to pretend that insurance can be reduced to catastrophic risk management for the healthy and genetically blessed. Unless we secretly desire socialized medicine itself, we ought not go there, because doing so will bring the masses out with pitchforks and torches to demand socialized medicine - if we indeed propose to say to the sick and debilitated, "You're on your own in the market, and if you can't afford the coverage, tough luck. Learn to do without." Of course, we might not say that; we might instead increase public provision of health care, as mentioned above, in order to safeguard the business models and profit margins of the insurance industry. But in that case, it will be obvious that we've decided to practice a sort of regressive class politics.

I tend to think that the predictive power of genetic testing for many things is vastly overrated. Another example of the market jumping onto a bandwagon that really isn't all it's cracked up to be. They'd probably lose money.

They'd probably lose money.

Not to be too glib about it, but that would be pretty cool. It would learn 'em something.

The real nightmare occurs if and when genetic testing becomes highly accurate. We'll see the kind of social stratification imagined only in fictional dystopias.

The key is to infuse the ban with greater moral reasoning so it may serve as solid firmament in the firewall against eugenics and soulless economic rationalization. For now, those of us who neither belong to, nor seek membership in the Super-race will celebrate with our imperfect brethren and, in a rare concession to free trade, Belgian beer.

I agree with many of the forecasts here, but disagree with the analyses for the most part. There is one major, major assumption being overlooked - that it is not only a social and communal need to have health care costs for the needy borne through the effort of others, but that it is a governmental object to enforce that result.

Let's ask ourselves what happens if gene testing goes the limit and those who are extremely lucky gene-wise can get insurance for a pittance. This by no means benefits the rich, since genes and wealth do not go together. It will still be the case that the wealthy will have health care needs comparable to the poor (at least initially). Unless the wealthy want to self-insure, which is not likely, they will still want to buy insurance - but it will cost more since the gene-rich will not be sharing. The money-poor who are gene-poor won't be able to afford that insurance.

Now, who ought to pay for the health care of the money-poor who are gene-poor, since free-market insurance won't pay for it when thy can't buy it? Should society do so as a mandatory social cost-sharing? This is by no means clear. To do this automatically implies removing (or at least downplaying) from me (a gene-rich and money-rich person) the obligation in charity to care for my neighbor in need.

I agree that the obligation is there on those who have more to concern themselves in the needs of those who have less. But there is no need for an assumption that this concern is best handled by a law mandating what otherwise would be an act of love and generosity, of mercy. The fact that my neighbor doesn't WANT to have to ask humbly with hat in hand for what amounts to a gift is not an argument for making this a legislative problem rather than a charitable problem.

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