Thursday, January 24, 2013

Cute, but naive: LTCi and DNA

Long Term Care insurance is one of the two most complicated products we sell. There are a lot of "moving parts," and underwriting is especially important. These plans represent a tremendous risk for carriers (and are priced to reflect this, of course). One factor upon which they rely is ones' family history and, sometimes, one's actual genetic predisposition.

As we've discussed previously, the use of genetic information in insurance underwriting is - to put it mildly - controversial. Under the Genetic Information Nondiscrimination Act (which dates back to 2008), health insurance carriers are proscribed from its use. But LTCi has not been considered "health insurance" and so was exempt from this prohibition.

Now, HHS Secretary Shecantbeserious is weighing the possibility of unilaterally changing that.

In a post at LifeHealthPro, actuary and LTCi wholesaler Claude Thau makes the case against her doing so, but undermines himself from almost the very start:

"A belief on the part of HHS that it has the right to unilaterally expand GINA would be similar to HHS’s position on the CLASS Act ...  The separation of powers  is the genius of the U.S. Constitution and it would be scary to me to see the Executive Branch undermine the constitution in that regard"

Cue laughtrack.

Since when has Madame Kathy cared a whit about overstepping her authority? Perhaps Mr Thau should consult with the owners of Domino's and Hobby Lobby about "unilateral expansion." Heck, she even offers advice on how insureds should defraud their carriers. Does he really think there are depths to which she wouldn't willingly plunge?

I sure don't.
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