Genetic Insurance Is A Hedge For Future

       A few months ago I learned
I might have inherited a genetic disorder. Dealing with that was nothing
compared to the nightmare all Americans will face if Bill Clinton gets
his way on genetic testing.

       In my case, a relative developed
a genetic condition that is believed to be inheritable. The odds I have
the gene are very low, but the only way to know for sure is to get tested.

       This where President Clinton
comes in. During the next 10 to 20 years, numerous tests for genetic diseases
and disorders are going to be developed. Such tests will enable people
to determine with great precision their odds of developing everything
from cancer to heart disease to diabetes.

       Clinton and other politicians
fear this development will increase the cost of insurance and even make
insurance unavailable for some people. If an insurance company knows,
thanks to genetic testing, that a person is likely to die by age 40 or
suffer a serious illness in his 30s, it would be crazy not to charge that
person higher premiums for life and health insurance. Insurance companies
are, after all, not charities but businesses that help consumers distribute
the cost of risk.

       Clinton’s solution is to support
a bill currently before Congress that would make it illegal for insurance
companies to discriminate against people on the basis of genetic tests.
Insurance companies would have to offer the same premiums and policies
to those who carry the gene for Huntington’s disease as for those who
test negative for every genetic condition. This solution, unfortunately,
would likely destroy the insurance industry.

       If I learn I’m going to die
from a genetic disease, and the insurance companies are required to offer
me the same premiums and policies as they offer others, my choice is simple
– I’m going to buy as much health and life insurance as I can afford and
leave a hefty inheritance to my family.

       As the people most likely
to develop illness or die prematurely buy more insurance while those at
lower risk purchase less, insurance company costs will rise. Premiums
will also rise and the insurance industry in general might become unprofitable.

       Fortunately there are other

       Alexander Tabarrok, an assistant
professor of economics at Ball State University, outlined an ingenious
alternative in the July/August issue of Contingencies, a magazine for

       Tabarrok’s solution is simple:
Since taking genetic tests imposes a risk that a person will learn he
has a genetic condition, people should take out insurance to protect themselves
against that risk.

       Tabarrok envisions a system
of mandatory genetic insurance like the system of mandatory car insurance
used throughout the nation. Just as states require automobile owners to
purchase insurance, so people taking genetic tests would be required to
purchase insurance. The insurance would cover the additional costs of
higher premiums and/or health care costs should the buyer be found to
carry a disease-causing gene.

       Unlike the proposal favored
by Clinton, Tabarrok’s genetic insurance would keep health insurance costs
at current levels and might even lower them. Since the risk of genetic
disease is already included in insurance costs, Tabarrok’s proposal essentially
just splits what is now one insurance policy into two.

       But since genetic insurance
removes any reason for people to avoid genetic tests, it would encourage
people to get genetic tests early in life. This would tend to reduce health
care costs, and hence insurance costs, as people received early treatment
for such diseases and increase their possibility of living long, healthy

       Someone with a gene increasing
the risk of heart disease, for example, could be advised to start a low
fat diet and regular exercise early in life, thereby increasing the probability
of avoiding heart disease altogether.

       Although Tabarrok’s proposal
would be great for consumers and insurance companies, it would be lousy
for politicians such as Clinton. Sure it would largely solve the genetic
testing dilemma, but it doesn’t let the president cast the insurance companies
as uncaring, profit-hungry Scrooges. It doesn’t create any huge new bureaucracy
or get the nation a step closer to nationalizing health care.

       Instead it simply uses market
forces to deliver the best goods at the best prices to consumers. If Clinton
would get behind that kind of policy, he could genuinely help people who
must make a difficult decision over genetic testing.

       This op-ed column originally
appeared in the Detroit News.

Leave a Reply