Every once in a while, a Slashdot post wanders out of the realm of the science/IT areas where the editors have the most expertise, and the results are often underwhelming. For example:
“The bill to ban genetic discrimination in employment or insurance coverage is moving forward. Is this the death knell of private insurance? I think private health insurance is pretty much incompatible with genetic testing (GT) for disease predisposition, if said testing turns out to be of any use whatsoever. The great strength of GT is that it will (as technology improves) take a lot of the uncertainty out of disease prediction. But that uncertainty is what insurance is based on. If discrimination is allowed, the person with the bad genes is out of luck because no one would insure them. However, if that isn’t allowed, the companies are in trouble. If I know I’m likely to get a certain condition, I’ll stock up on ‘insurance’ for it. The only solution I can see is single-payer universal coverage along the lines of the Canadian model, where everyone pays, and no one (insurer or patient) can game the system based on advance knowledge of the outcomes. Any other ideas? This bill has been in the works for a while.”
At the risk of committing the same sin of opining outside of my area of expertise, this seems to be rather misguided. I should give the guy credit for understanding the basic point that insurance is about managing risk. If you’re 100 percent sure you’ll need a heart transplant in the near future, and you buy a policy that will pay for it, that’s not an “insurance policy.” It’s just a health care plan. An insurance policy is a tool for managing the risks of events that you don’t know will definitely happen.
Unfortunately, this anonymous reader takes this kernel of truth and uses it to draw sweeping conclusions that just don’t follow from them. Because genetic tests hardly ever tell you precisely what diseases you’ll get and when you’ll get them. Rather, they tell you about dispositions and tendencies. They say “your chance of getting heart disease is twice as high as normal” or “You’re likely to get parkinsons disease sometime in your 40s or 50s.”
If it were true that anyone with an elevated risk of health problems would be ineligible for health insurance, then you’d also expect that men under 30 would be ineligible for auto insurance. But of course, that’s not what happens. Insurance companies take the elevated risk into account in setting premiums. In a world with widespread genetic screening, the price of your insurance would take into account your genetic predispositions. Those who are blessed with good genes would pay lower premiums, while those with bad genes would pay higher premiums.
Now, reasonable people can object that this is unfair. And there will likely be a small minority of individuals whose genes are so bad that they’ll be unable to pay the premium required to properly compensate the insurance company for the risk they’re taking. But if you’re inclined to have the state do something about this, it doesn’t by any means follow that the state needs to run the entire insurance/payment system. Rather, the state can take a variety of actions targeted at the losers of the genetic lottery while leaving the market free to work for the majority of individuals with average or below-average risks. This can take several forms. One would be premium subsidies at the front end: say, the state picks up a percentage of the premium for people with above-average premiums. Another would be to directly subsidize treatments for the most expensive-to-treat diseases, which would have the effect of reducing premiums for people with those diseases. Or you can (although I think we shouldn’t) continue in the direction we’ve been going, of imposing all sorts of implicit cross-subsidies in the health care market itself (such as the tax preferences for employer-provided group policies and rules requiring hospitals to treat patients regardless of their ability to pay).
This isn’t a health care blog, and I’m not a health care expert, so I won’t venture an opinion on which of those options, if any, is most desirable. But it’s a non-sequitur to assert that because we’ll be able to more accurately assess risk, that private insurance will no longer be viable. The insurance industry is extremely good at pricing risk in other parts of the economy, and they’d do it in health care too if the government didn’t exert so much effort to preventing them from doing so. It’s a complete non-sequitur to suggest that any of this is a strong argument for a centrally-planned government health care system.
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