Insurers face strong economic incentives to identify individuals perceived to be at increased risk for ill health in the future. Insurance is a publicly regulated activity designed to meet broad community goals. In the case of health insurance, the goal is to ensure access to health care by providing adequate financing mechanisms. In the case of life and disability insurance, the goal is to provide families some measure of economic security following a tragic death or disability. Rating practices for all three types of insurance are becoming increasing stringent, violate individual privacy, and seem geared to identify and insure only the healthy and long-lived. The number of individuals stigmatized as “substandard” risks or “uninsurable” has increased. Currently nearly 100 million Americans either lack health insurance or are underinsured. More and more consumers are now unable to obtain affordable life and disability insurance products. Our current insurance market system is not meeting its primary publicly endorsed goal. This stratification of our community into “haves” and “have-nots” is neither morally or publicly acceptable.
As publicly regulated entities, insurance companies must adopt and enact practices that the community views as nondiscriminatory, fair and equitable both in order to survive in a competitive market and to retain their legal rights to operate. Because of the important public impact of the insurance business, the industry’s programs and practices should always be open to community scrutiny and specific control.
Thus, though from a business perspective fairness may dictate “treating similar risks alike,” it may be significantly in the public interest to insist that different risks also be treated as alike. The public’s view of fairness requires that groups that differ by race, ethnicity or religious affiliation, and who may have differing actuarial morbidity or mortality rates, be offered similar insurance contracts. Genetic information is another potentially discriminating factor that the public has indicated cannot be fairly included in insurance underwriting practices. Several national polls demonstrate this view. In this manner, the community through political and regulatory processes has asserted its view of fairness as dominant over the narrower insurance industry derived conception.
There is a strong community sentiment against using “pre-existing medical condition” exclusions to deny people insurance. The removal from insurance pools of those who clearly need the benefits which insurance based financing affords strikes a blow to the social purpose of insurance. In fact, the spreading of risk across a community (community rating) is exactly what the public intended when it first allowed private insurers to provide such an important social product.
Unlike infectious diseases, genetic conditions exist at a fairly stable incidence in our society. There is no epidemic of genetic conditions. Thus, they are already reflected in the actuarial tables used by insurers to establish rates. It is misleading for insurers to suggest that their financial solvency will be jeopardized if they are obligated to insure people at risk for genetic conditions. In fact, insurers have always insured people at risk for genetic conditions. Previously, however, it was not possible to identify those people at risk for genetic conditions before they become they became ill with the disorder.
The insurance industry has offered no compelling reason to specifically exclude this group from the insured pool now. Early identification of risk status may actually lead to insurer cost savings as a result of preventative care and longer life spans during which premiums can be collected.
Recent developments in human genetic science and the technology of testing are not identifying new costly diseases that were not previously accounted for by the insurance industry’s actuarial data. Rather, these developments are only facilitating the identification of those individuals who carry disease-associated genes at earlier times; many of these people will never have a related illness, or will experience a lifetime of the asymptomatic, pre-symptomatic or minimally symptomatic phases of the condition. It is not, therefore, the cost of financing the care of genetic conditions which is driving the call for access and inclusion of genetic information in insurance practices. There is no reason for insurers to begin to use this new predictive information now, merely because it is available.
The California consumer does have strong genetic privacy protections in the area of health insurance, though violations of these laws can, and will occur.
This section will inform you of your genetic privacy in health insurance protections.