If discrimination based on comprehensive genetic screening is legal, we can expect health providers to tailor plans according to our individual risk factors. That might be to the disadvantage of a minority of high-risk individuals, but greater information about risk factors will lower uncertainty, and thus lower rates overall. Furthermore, insurers will offer incentives to people who take proactive steps to discover health risks and take steps to alleviate them. Expensive procedures such as frequent biopsies or preemptive removal of organs might be fully covered for individuals whose genetic profiles uncover a high cancer risk.
Unfortunately, Congress did not heed my arguments, and banned genetic discrimination anyway. It is now illegal for health insurers to take genetic factors into consideration when setting premiums. What effect do you think the law had on the incentive of insurance companies to pay for their customer’s genetic screening?
If the goal of the law was to encourage genetic screening, it clearly had the opposite effect. In response, celebrities are now “fighting for women to have access to MRIs and genetic testing.” Having coerced insurance companies to ignore the results of genetic testing, people now want to coerce them to pay for it.
Do you think that people who find out that they have a higher probability of having an illness with genetic factors would be more likely to purchase more health insurance than individuals with a low probability of genetic illness? As I wrote last year,
It does not take an economist to predict that rates would immediately rise, as healthy people, refusing to pay for their neighbor’s health risks, stopped using insurance altogether. As the young and healthy jump ship, insurance companies would have to increase rates, accelerating the trend. Without further government interference, the health insurance business would disappear completely, shortly after millionaires on their deathbeds became the only people able to afford policies.
Are you still wondering why healthcare is so expensive in the U.S.?