A Brave New Insurance
By William R. Brody Originally published in The Wall Street Journal
December 20, 2002 Genetic testing is health insurance's iceberg. Right now, most of the consequences are out of sight. But just below the surface, there is an enormous problem lurking. At a recent meeting of research university presidents with Francis Collins, director of the National Human Genome Research Institute, a fractious debate broke out over genetic testing. Some argued that insurance companies should be barred from using genetic tests to set insurance rates or determine insurability. Others responded that if customers learn of increased risk of illness by those tests, they will buy lots of insurance fairly cheaply, thus skewing the insurance pool and creating the potential of financial disaster for health-insurance companies. In the years ahead, genetic testing will become gradually more pervasive, and at the same time, our knowledge of the risk of disease associated with the results of those tests will become increasingly refined. The result could be the end of private health insurance as we now know it. If legislatures pass laws banning insurers from using genetic screening data, those companies will protect themselves by continually raising premiums to consumers. Some may even go bankrupt because purchasers of insurance will be the more knowledgeable in the transaction. Yet if we allow insurers to use genetic data, many more individuals will be left without coverage because they will be deemed too high-risk to warrant insurance at affordable prices. Given this conundrum, there is only one solution that can preserve the concept of health insurance: universal coverage. The idea behind universal coverage is actually a very old concept, called "community rating," in which the individual purchasing insurance does so as part of a large group, or community. The basic premise is to spread the risk: Individual differences are averaged over that large lot. True universal coverage would give health insurance to every person, from birth to death. The cost of that insurance would then be based upon the average risk of the national pool. Regional, gender, ethnic, and genetic differences would not be taken into account for the individual policy holder, but would be factored into determining the risk of the national pool. The government could provide the insurance, or could allow multiple companies to provide policies while requiring that every insurance company use the same actuarial data for determining policy pricing. Washington could make the insurance affordable to all through tax credits or other incentives for low-income individuals and for children. Moving to universal coverage presents many challenges, but it also presents the opportunity to bring back into the health-care system tens of millions of Americans who now lack the means to acquire medical insurance. I suspect that day is coming sooner than many people imagine. _____________________________
Dr. Brody is president of The Johns Hopkins University.
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