It’s All in the Genes…

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Recently, the debate about using genetic testing in underwriting has heated up. Newswise is an online news aggregator, a sort of Lexis-Nexis wannabe. In their most recent release, they found that “40 percent of people already undergoing genetic testing are worried that participation might affect their future insurance coverage.”

Now, at first glance, this would seem to be a pretty significant problem, and an issue which the insurance industry should address.

But things aren’t always what they seem. The poll asked participants whether or not they agreed that: “(g)enetic testing is not a good idea because you might have trouble getting or keeping your insurance.”

The problem is, the question is useless. First, there is a difference in how life insurance is underwritten and renewed, and how health insurance is underwritten and renewed. So to ask about the generic “insurance” is to miss a key point.

Second, “getting” insurance and “keeping” insurance are two different animals. The “getting” part is called underwriting, and in Ohio, companies are forbidden – by law – from using genetic testing in underwriting health insurance. The “keeping” part is irrelevant, since a carrier can’t cancel your health insurance except for very limited reasons (including fraudulent claims, misrepresentation on the application, and non-payment of premiums). There is no provision for changing or canceling a plan based on the results of any genetic tests.

Life insurance underwriters may take genetic factors into consideration. Obviously, a family history of cancer, for example, is going to play a part in that process. But it is merely one tool, and – unlike health insurance – there is so much competition in the life insurance field that even if one carrier says no, there’ll be more than a few others waiting to say yes. That’s the “getting” part. The “keeping part” is irrelevant: life insurance is also a unilateral contract, and cannot be cancelled by the carrier except for those limited circumstances previously described.

But that’s Ohio. What’s happening on the national scene? Well, the Changes in Health Care Financing and Organization program, part of The Robert Wood Johnson Foundation, discusses this in their April issue. They point out that “earlier this year, Congress weighed in with proposed legislation in the Senate and the House prohibiting discrimination on the basis of genetic information with respect to health insurance.”

Senate bill S 306, introduced by Olympia Snowe, prohibits discrimination on the basis of genetic information with respect to health insurance and employment. It would apply to small group plans, individual medical, and medicare supplements. Currently, the bill is “held at the desk,” which means that it’s waiting be matched up with its House counterpart.

And speaking of the House, H.R. 1227 is the Genetic Information Nondiscrimination Act of 2005. Sponsored by Rep Judy Biggert of Illinois, it pretty much matches up with its Senate cousin: health insurers would be barred from using genetic testing results in setting premiums, and couldn’t require applicants to undergo such testing. This bill has been referred to sub-committee, and will eventually be paired up with S 306.

So far, I’ve outlined the technical and legislative aspects of this issue. But there’s more here, on a personal level. As an agent, I represent the carrier, but I work for my clients. This is a fine line, and one which is often obscured in the flurry of paperwork that is the application and underwriting process. I understand that carriers want and/or need as much information as possible to correctly price a given risk. But I also think that there is something Orwellian in the use of genetic testing to decide whether or not someone should pay more for their insurance, or even be covered at all.

Just my $.02