Essay, Research Paper: Insurance And Genetics

INSURANCE AND GENETIC TESTING
Do you have health insurance? When you go to the doctor do you think about how your insurance gives you coverage? When your pay check is a little short because of your premium are you angry? I would like to discuss with you what is going to happen when genetic testing becomes more widely used. In order to discuss how genetic testing is going to affect the insurance industry we must first discuss how insurance works. I know that there are two sides to every story, so I would also like to discuss the pro's and con's of genetic testing. Hopefully, by the end of this presentation you will better understand why this is such an important topic.
First, I would like to talk about how insurance works. According to Risk Management and Insurance, insurance is defined as "a social device in which a group of individuals who transfer risk in order to combine experience, which permits mathematical prediction of losses, and provides for payment of losses from funds contributed by all members who transferred risk." Insurance is based on the uncertainty of life. If you have a risk, then most people tend to want to get rid of the risk, or transfer it. The person who transfers risk is the insured and the one who assumes risk, is the insurer. Once you decide to transfer risk you are put into a pool, or a group in which everyone has the same risk as you. Not everyone in the pool is going to get the disease or ailment but they all pay the same premium to cover the people who do. The premium is based on the amount of risk you have. This is based entirely on history and statistics.
This is a topic on the mind of many people who are involved in the industry. It is also an important topic in government. Democrats and civil rights groups favor legislation that would
set stringent privacy standards, ban discrimination by insurers and employers, and allow discrimination victims to seek uncapped damages in court. They have so far been unable to pass such a bill. Republicans have supported more narrow legislation, focusing on discrimination by insurers only. Most Americans want privacy, and of course do not want to be discriminated against. The industry wants to find a healthy way of dealing with genetic testing, since there is no way to stop people from getting the tests.
There are good things as well as bad that come along with technological advances such as genetic testing. Using genetic testing can help find a disease, that with early detection can be
treated. It can also be used to detect a genetic disease in an unborn child, or the probability that the couple will have a child with a genetic disease. This, in effect, reduces the uncertainty of life. That is where the effect on insurance comes in. If we know that we are not going to have a certain disease then it is likely we will choose not to insure against that specific disease. That leaves only the ones who will get sick to seek insurance. Since, insurance uses the premium from the ones who do not develop the disease to pay for the ones who do have the disease, this creates a problem. There would not be enough money to pay for all of the care of the insured. Not all illnesses are caused by genetics, so of course there would still be a need for some insurance. According to an article in Christian Science Monitor , "more than 80% of Americans seek to block the access of employers and insurance companies to genetic information according to polls." If insurance companies do not have access to these tests, it is my opinion the insurance industry will go bankrupt. Based on information given to the insurance company, such as; height, weight, age, sex, and previous history, an insured will be put into a pool with others who know they are going to get a disease and are not paying enough to cover it. This will drive
the price of insurance so high, to try and cover for those with the disease. Eventually only those
who know they have a disease will be willing to pay so much for insurance. Since insurance is based on uncertainty that is where the problem comes in. If everyone with insurance is certain to have a genetic disease there is no uncertainty, therefor no insurance. On the other hand, if they had access to the results of genetic testing, there could be a lot of problems also. They could deny anyone with a genetic disease, and then there would also not be any uncertainty. The insurance company would make a lot of profit off of those who do not have a tendency towards a disease. This way is more easy to fix than the first.
The industry is trying to figure out a way to deal with this now. If the government denies insurance companies access to results then they will go bankrupt. If the government allows access, there are ways to prevent a problem. One fix would be set up special pools for those who have a tendency towards a disease. That would allow them to pay a premium based on the fact that they have the tendency. They could then have some sort of government funding to back up the insurance for these people. Or the government could completely fund the medical care of those who cannot get insurance, although either way it is still going to amount to other Americans paying for the disease.
I know that many people do not even think about the effect that genetic testing is going to have on our future. As and insurance major, I think about it often. It is a topic that should not be ignored. I am not usually one who is thrilled about government intervention. In this case however, I make an exception. Without laws to regulate the industry it will be impossible for us to continue in the same fashion as today. My fix is to keep the government involved, that is the only way I see to stop the problem.