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Genetic discrimination: Misplaced worries, but right argument for health reform

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Today's New York Times describes how many people are foregoing useful genetic tests out of fear that they will face discrimination from health insurers or from others.

Many people are paying private labs to have tests secretly done. It is worth it to people to pay sometimes exorbitant sums to keep the results out of their medical records.

As it happens, the medical or personal value of these tests is often oversold. Tests with very low or unknown predictive value are readily sold to an anxious and affluent segment of the consuming public. Many of these tests produce needless anxiety and interventions, or create false hopes.

Whatever the caveats, peoples' desire to gauge their risk of senile dementia or prostate cancer requires no explanation, as does their intense desire to keep such information closely held. In this age of medical informatics and underwriting, it is unsurprising that people are wary to conduct diagnostic tests that may label them poor insurance risks.

Genetic discrimination is much less common than people fear. As the Times relates, insurers insist that they do not do this. Individuals enjoy significant, though incomplete legal protections against the use of genetic markers in coverage decisions. Such cases obviously happen, but they are surprisingly hard to find in the legal and medical literature. Even if the industry's protestations are slightly fudged, the fear of genetic discrimination is way out of proportion to current practice.

In a larger sense, though, people have the right worry. As long as America choose to have an insurance industry that charges customers on the basis of expected medical costs, firms will face obvious market pressures and incentives to use whatever information they can find to avoid high-risk customers or to charge these consumers more than they would charge others. Companies can follow many strategies to achieve favorable risk selection. They can offer free health club memberships, offer poor oncology reimbursement, and do countless other things with the same end in mind.

Genetic tests are the most blatant approach. There is indeed something sinister about using a quick cheek swab to deny me insurance when to all outward appearances I am young and healthy. It's surprisingly hard, however, to pinpoint the sinister thing here. When you think about it, there is nothing unique about genetic testing. Many medical tests look for specific proteins associated with a costly disease. What's the real difference between measuring someone's cholesterol, using a blood pressure cuff, or examining a little strand of DNA?

A surprising number of people believe it is awful to use a genetic cystic fibrosis test to deny someone health insurance, but that it is OK to deny coverage to people because they are actually sick. It's not OK.

For practical reasons, we may have a better shot at stopping genetic discrimination, but the real problem comes from the basic structure of the insurance market. If our medical risks were transparent, and if consumers and insurers were free to write whatever contract they wanted, market forces would drive every person's cost of health insurance towards the ironically labeled "actuarially fair" premium. People with low expected costs would pay low premiums. People with high expected costs would pay high premiums. In a statistical sense, no one class of consumers would subsidize any other.

The specter of genetic testing, although it outstrips market realities, is unsettling because it reminds us of the true premises and costs of our insurance system. If we want a system in which affluent healthy people pay more to subsidize the less-affluent or the less-healthy, we need something different.

A key goal of health reform is to stop insurers from denying coverage or raising premiums on the basis of preexisting conditions. A single-payer system is probably the most valuable, though most politically difficult alternative to address these concerns. The Obama plan, and the Clinton plan too, provide a more politically feasible response to the same difficulties. If health reform is defeated, I think our private health insurance system will eventually go down, too, because it is quickly undermining its own legitimacy.

No one should forego a valuable test because the result might define them as medically uninsurable due to a preexisting condition. In fact no one should be uninsurable in the first place. This simple proposition highlights the necessity, but also the great difficulty, of health reform.