If you have a test taken, to see if you have genes that show you may be at risk of developing a life threatening disease, the British government allows your insurance company to look at the results. Governments in the rest of Europe ceased this as they feared the results could be used by insurers to perhaps increase premiums or even refuse cover altogether.
Unless the insurers develop a voluntary code preventing the use of test results, MPs this week have called on the government to enforce a two year suspension on using them.
Should the test results be private?
The government is concerned that the insurance industry could collapse if genetic test results were kept private.
Why would it collapse?
A major problem in the insurance industry is what the textbooks call “adverse selection”. The likelihood of somebody buying life insurance, if they know they are going to die earlier than expected, is high. They want to know that their families will get some financial help when this happens. If a large amount of high risk people buy insurance they may not live long enough to cover the payout with their premiums.
Therefore, to make up for losses insurers will have to raise premiums thus having a negative effect on how insurance looks to a person with a normal life expectancy. Soon only high risk people will buy insurance and the good risks driven out of the market altogether. Eventually the market would crumple as it is only lucrative when the high and low risks are shared.
Is this happening?
At the moment, as genetic testing is in its early stages, adverse selection is mainly a speculative issue. The government only considers one test to be precise enough for insurers to use. In the last three years one insurance company has sold 460,000 policies but say genetic tests would only be applicable to 14.With developments in testing being so rapid and the industry wanting to use more tests, the problem will soon become real.
What can be done to solve it?
To stop the market from collapsing the government seems to have decided to allow the industry to view results. This however could create a genetic “underclass” of people who are not capable of getting insurance. People who get clean test results could be offered better rates than those at risk thereby making it unaffordable for them. Shockingly, tests that one day could perhaps save lifes could be discouraged as it may make insurance unobtainable.
What could be done to stop genetic tests being used to discriminate against people?
To solve the problem totally the life insurance industry would have to be made public. This would prevent good risks opting for cheaper deals and high risks bankrupting insurers. These days that is not a popular solution to market failure. The alternative would be for the government to insure the high risks, which would be costly.
What else could be done?
Before people took tests they could be required to take out insurance. Doing this would not stop people doing tests nor allow insurers to take advantage of test results thus damaging the market.
Whatever happens the government is going to have to play a bigger part in the life insurance market.
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Insurance companies are now allowed to consider the results of genetic test when underwriting policies. DNA samples will be permitted only in cases where the policyholder may have inherited the degenerative Huntington’s disease.
The decision of the expert advisory body reporting to the Government on genetics and insurance will open the door to the consideration of genetic test results for diseases which are inherited, including breast cancer.
Consumer groups and opposition MPs maintain that the introduction of DNA tests for insurance will create a group of people – the genetic underclass – who will be unable to get medical insurance cover.
A prime example of a group who will have to pay higher premiums and may never qualify for life insurance, are those inheriting the gene associated with Huntington’s, a terminal disease. Failure to disclose this disease to an insurance company following a DNA test would invalidate the cover.
The Liberal Democrat spokesman for health, Dr Peter Brand, says that not only is it going to be very difficult to regulate genetic testing, but it will create not only a genetic underclass, but also a health underclass. He maintains that although it is sensible to test when a genetic disease is treatable, it should be carried out confidentially, otherwise people won’t be able to sign up for mortgages and insurance.
An independent group of health professionals, geneticists and actuaries, known as the Genetics and Insurance Committee, has been established by the Department of Health, to assess genetic tests.
Hereditary breast cancer, myotonic dystrophy and Alzheimer’s disease are among nine diseases, which the Association of British Insurers (ABI) plans to request permission to include in a list of diseases for which genetic test results can be requested.
The National Consumer Council considers the granting of this application could be a backward step, as it will discourage people from applying for a test, which could be in their own interest.
Insurers will be told that they may consider genetic tests for Huntington’s when assessing life insurance cover, although not for mortgage protection and some other types of insurance cover. Cornhill and Standard Life do not consider the results from genetic testing when assessing a claim, although some insurance companies may do..
The Huntington’s Disease Association accepts that insurers must behave as ‘commercial companies’ Each person whose parent has Huntington’s disease is born with a 50-50 chance of inheriting the faulty gene. Anyone who inherits the faulty gene will, at some stage, develop the disease. A genetic test is available from Regional Genetic Clinics throughout the country. This test will usually be able to show whether someone has inherited the faulty gene, but it will not indicate the age at which they will develop the disease.50 per cent of people have a chance of inheriting Huntington’s from a parent who is diagnosed with the disease There are about 7000 people suffering from the illness in the country.
Juvenile Huntington’s Disease (JHD) refers to anyone who develops signs or symptoms of HD before they are 20 years old. It is a relatively rare condition and only about 5% of people affected with HD will develop symptoms this young. This can make it quite an isolating experience for the person affected by HD, their family, and any professionals that are helping them.
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