David Friedman Has His Genes Tested
Reductions in the cost of genetic testing and improvements in what we know about what it tells us produce obvious benefits; if you know you are likely to have some particular medical problem, you may be able to take precautions against it. But they also have at least one potential downside. The more is known about the chance of bad things happening to us, the less able we will be to insure against them…
If we allow both insurance companies and their customers to make use of genetic information, then both high risk and low risk customers can buy insurance, but at different prices.
I’m already paying for other people’s pre-natal care and heaven only knows what else. I’m not comfortable being charged for what I might come down with because of genetic testing. I would shocked and awed if a pre-disposition to brain tumors raised my rate by only $3 a year, as Freidman calculates. I think insurers calculate more freely.
Regulations against allowing insurers to use genetic tests are short sighted. If we allow individuals to buy insurance based on the results of genetic tests, we should allow insurers to use the same information. Otherwise, people will self-select based on the results.
While I agree that there shouldn’t be a regulation prohibiting insurers from asking, I don’t think customers shoudl be penalized for failing to disclose genetic examinations.
What a fascinating post. I, for one, had no idea that the mapping of the genome had succeeded to such a degree that we had gained such an exact understanding. Undoubtedly, there are still more lessons to be learned, but I’m optimistic about what this breakthrough could mean for treatment options.
And in response to Davie’s comment, I think that the “market for lemons” scenario explains that what you advocate is untenable in the long run. If customers have access to their own medical information, it doesn’t matter that insurers do not. Those people who, post-testing, discover that they are healthy (and therefore do not need insurance) will opt out of the market. This will leave only those who, through testing, discover that they desperately need insurance. Insurance companies will recognize the self-selection that has taken place and that the only customers that they still have are “lemons,” along with a few healthy people who are overly cautious.
Interestingly, Ron Paul was the lone dissenter against the Genetic Information Nondiscrimination Act
Mark makes a great point. I will have to ponder this issue more deeply.
I am suspicious of the assumption that “lemons” will flock to insurers. I do think more folks would seek insurance but I’m not sure it will unleash the hoards.
Everyone *wants* insurance but many skip out because they can’t afford it or don’t think they need it.
Those who can’t afford insurance, the largest group, likely wouldn’t be able to afford the test. Many would rationalize this decision by saying something like “I know what runs in my family already and I couldn’t afford the insurance anyways so why pay the out of pocket expense?”
Those who don’t think they need insurance could be compelled to take the test, but seem unlikely to do so. By definition these folks are dealing in risks that others find unacceptable. If they’d take the risk to skip out of insurance, why not also skip out on genetic testing?
“Those who can’t afford insurance, the largest group, likely wouldn’t be able to afford the test.”
The test cost me about a hundred dollars, and the cost of genetic testing has been falling steeply in recent years. My guess is that, a decade from now, we will be talking about something under ten dollars.
“I don’t think customers shoudl be penalized for failing to disclose genetic examinations.”
I’m not sure what “penalized” means here. If I were a poker player, I would be less willing to play for money against someone I knew was a really good player–is that penalizing him? Is it penalizing a customer who knows something about his genetic risks to refuse to insure him, or to offer to insure him only at a price appropriate for bad risks, if he refuses to let me have the same information he has? His refusal is, after all, some evidence that the news in his genes is bad.