The Federal Legislative Response to Genetic Discrimination in the Underwriting of Health Insurance Policies
Cristina Lipan, May 11, 2009
© All Rights Reserved.
The recent advancements in the science of genetics have sparked a revolution of optimism for improvements in medicine as well as concern about the dangerous potentials of this newfound knowledge. The information provided by our DNA can explain many mysteries of human pathology and can therefore help us understand what causes many of the diseases that plague us. With this understanding, we can hope to cure society of many illnesses.
However, this knowledge has generated much debate on the extent it can be used. There is an innate fear of such omniscience. If DNA makes us who we are, then do we have any control over who we become? Can DNA be used to differentiate between us – to classify us and discriminate among those of us who have “bad” genes? Whether these fears are well founded is unclear. Nevertheless, public concern over the potential for harm may be enough to justify implementing policies that curb the possibility of these consequences, however remote they may be.
Although the science of genetics still has to be improved to be able to accurately predict genetic conditions, the information it provides can be a good indicator of future illnesses. In this respect, this information has the potential to be used by insurers to determine the risks they are taking when issuing a policy to an individual. In a purely economic sense, this is fair. Just as a bank assesses the risks of an individual in determining whether or not to extend credit, an insurer also assesses the risks of insuring an individual. The lower the risk, the more likely the insurer is to issue a policy; the higher the risk, the less likely an insurer is to issue a policy. In order for an insurer to stay solvent, it must ensure that it can pay out for losses using the money they receive in the form of premiums. Therefore, an insurer needs to be able to determine what premiums they must collect, and this depends on the risks they take.
However, the use of genetic information for underwriting purposes has potential for discrimination. The constitutional ideals in our society lead us to automatically see the negatives of disclosing such information. The right to privacy and the right to equal protection play an important role in our perspectives of such use. Additionally, the possibility of the unlimited capabilities of such invasive knowledge creates a fear of its potential. This fear leads to an unwillingness to partake in the testing and development of genetic science by individuals. Thus, the full benefits of genetic research cannot be realized.
In response to these concerns, Congress has decided to pass legislation limiting the use of genetic information for purposes of underwriting by health insurers. However, the benefits of such legislation are uncertain. The legislation enacted only protects certain information and certain individuals, while leaving a large portion of our society unprotected. Still, this partial protection may be a step in the right direction.
The Human Genome Project
The U.S. Human Genome Project began in 1990 and was completed in 2003. Its goals, among others, were to “identify all the approximately 20,000-25,000 genes in human DNA,” and to “determine the sequences of the 3 billion chemical base pairs that make up human DNA.” The Human Genome Project’s purpose is to “identify and localize every gene within the appropriate chromosome and to understand the genes and the part they play as they interact in human pathology and human development.” Knowledge about human DNA is the basis for discovering ways to treat, diagnose and prevent human diseases and disorders.  This achievement in human ingenuity has created tremendous opportunities to better our society; however, there are many dangers that come along with this new understanding of our humanity.
Genetic tests are used to diagnose existing health conditions and to predict future health conditions of those at risk of a genetic disease. This information can be used to improve the early detection of genetic illnesses; when coupled with preventative measures, we can curb or even eliminate the onset of certain diseases. Additionally, this information can be used by individuals to make important life decisions such as what career to choose and whether or not to bear children.
Genetic tests can determine whether a person “has a certain genotype, either by recognizing the actual DNA sequence of that gene (or genes), or by identifying nearby markers.” Some genotypes are determinative of a specific illness; for example, everyone who has the Huntington’s disease gene will invariably develop that disease. This can be very beneficial to health insurers in determining whether to offer policies to individuals, what would be included in the policy’s coverage, and what rates to charge those individuals; thus, an insurance company would be able to allocate specific risks more efficiently. However, most genotypes are not determinative; in most cases, it is uncertain whether the presence of a particular gene will lead to a disease, given that environmental factors also play a role in the onset of illnesses.
A consequence of the Human Genome Project is the debate on whether or not to permit the use of genetic information in the underwriting of health insurance policies. The following passage summarizes this debate:
Those who favor a ban on genetic testing for insurance . . . generally point to the following factors: the need for fairness in risk distribution; the availability of insurance; the danger of discrimination, abuse, and stigmatization of individuals with genetic diseases and their relatives; concern over confidentiality of genetic information; the desire to protect an individual’s right not to know his or her genetic profile; the preservation of individual autonomy regarding genetic information; and the absence of absolute reliability, accuracy, and predictability based on genetic testing for sound actuarial risk classification.
By contrast, those who support the use of DNA tests in insurance . . . emphasize the need for equitable, not equal, distribution of risk; the precedent set by the current use of family histories in insurance; the need to improve the efficiency of actuarial underwriting vis a vis genetic testing; the fears of adverse selection if individuals with known serious health risks disproportionally take advantage of insurance opportunities; thus bankrupting the industry; the applicant’s good faith duty to disclose; and the unlikelihood that underwriting based on genetic tests will deprive people of insurance.
Use of Genetic Discrimination in the Underwriting of Insurance Policies
Generally speaking, the function of insurance is to “protect the policyholder in the event of a future loss.” Insurance companies transfer risk among its policyholders; some policyholder are higher risk and some are lower risk. The result is that when there is a large pool of diverse risks, the insurance companies become risk-neutral. In addition, insurers “attempt to set a price that is proportional to the degree of risk posed by each insured.” In order to determine and allocate these risks, however, insurers need to have certain information.
Individuals who buy insurance often have a better idea of the risks they face than do the sellers of insurance. Those who know that they face large risks are more likely to buy insurance than people who face small risks. The problem of adverse selection arises when only people with big risks buy insurance. If the insurer starts paying out a lot more than they charge in premiums, the insurance company will no longer be able to stay in business. It is therefore important for insurers to have access to information.
Genetic information can improve efficiency in health insurance by allowing insurers to accurately classify risks, and therefore charge the price of coverage equal to its value. The insured can then make the determination on what amount of coverage he is willing to pay for and possibly change health habits to decrease the risk of health-related loss, which increases efficiency overall. Therefore, a prohibition on the use of all information in transactions, such as genetic information for the underwriting of insurance policies, will reduce this efficiency. 
Insurers may fairly discriminate by using the information to accurately predict the risk associated with providing coverage, and “to charge exactly for it, no more and no less.” It is the essence of an insurance company to take on informed risks and to classify individuals by various risk factors, of which genetic information is one. Otherwise, no insurer would be willing to provide this protection to individuals; if a business cannot make a profit or loses money, there is no reason to be in business. Not only will the insurance companies fail, but individuals will no longer have access to insurance.
The economic efficiency theory holds that the free exchange of information creates the most efficient transaction.  The argument for full disclosure is that:
Privacy facilitates attempts by individuals to manipulate the world around them by selective disclosure of facts about themselves. . . . [P]rivacy can provide a considerable obstacle to efficient marketplace transactions through its effect on the ongoing exchange of personal data that is part of social life. An individual who manipulates others by limiting access her personal data has benefitted from harmful information asymmetries.
However, free disclosure of personal information is not necessarily the best option, since there is such a potential for social harm. Paul M. Schwartz discusses why full disclosure will not work:
Successful insurance markets depend on risk-spreading that draws on wide risk pools. When employers use health care data to make employment decisions, however, the result is shrinking coverage for an ever larger proportion of the population. As individuals who are deemed to be worse off are placed outside of the employment-based market for health care insurance, this already disfavored group shares more and more risk and is obligated to pay a higher and higher insurance premium (or make greater demands upon taxpayer-funded or nonprofit programs). This kind of risk selection also distorts competition by encouraging insurers and employers to seek out individuals who are likely to have lower needs than their premiums. Such biased selection has been found to pose a threat to the optimal functioning of health care markets by creating an incentive for employers and insurance providers to strive for lower than average risk groups rather than competing to provide health care services in the most efficient fashion. In addition, when risk pools are defined in a particularly narrow way, insurance markets for these groups can become unaffordable and even collapse.
Another concern is that genetic information is imperfect and uncertain. “Genetic information generally is incapable of telling whether an individual with a given genetic make-up will ever suffer from a given condition or how mild or severe any outbreak of the indicated condition will be.” Full disclosure and use of this information by insurers might lead to unnecessary discrimination since it will no longer be just a means of accurately predicting future loss, but a tool to discriminate against a very low risk of loss. For example, certain individuals that have a specific cancer gene have a predisposition to that cancer. However, only some of these individuals will develop cancer, and some may not. The probability of cancer developing is not a sufficient justification for discrimination in the underwriting of insurance policies. Insurers will have both high and low risk insureds their pool, and the risk they take becomes neutral.
The Fear of Disclosed Genetic Information
The media has contributed to the public’s fear of the disclosure of genetic information. The fear generated is that the use of genetic information will cause widespread use of DNA as a determining factor of classifying individuals; this can be described as the Gattaca Fear. The movie Gattaca depicts a society where an individual’s genes and DNA are the primary factors in determining social class. Those who do not have the accepted genes become part of an underclass that faces extreme genetic discrimination. This portrays the fear the public has of the unknown and of how such powerful knowledge has the possibility of completely changing the world in which we live. In addition, there is a fear that it will “transform the natural order through genetic manipulation.”
In many ways, an individual’s DNA is indicative of who they are. Similar to the religious concept of predestination, there is the idea that your DNA determines one’s fate in life, and there is nothing that can be done to change it. Knowledge of DNA forces upon the individual “unwanted self-awareness.” Individuals may be fearful that this knowledge might reveal certain unfavorable traits or predispositions to illnesses, which they cannot control. It is of the very essence of our humanity that we have autonomy and control over our own lives, and this knowledge that our DNA decides who we will be destroys this control.
Similarly, there is the fear that the disclosure of genetic information will be used to one’s disadvantage in life. This is troubling to most people because of the unchangeable and uncontrollable nature of their genetic make-up; it seems innately unfair to be at a disadvantage for something that you have no control over. The disadvantages might be personal (for example, friends might pity or shun the individual) or they might be economical, as is the case with the underwriting of insurance policies. (Another economical disadvantage is that a “jury or an insurance company might award less compensation to a disabled tort victim whose genetic profile indicated a shorter-than-normal life expectancy.”)
The Need for Prohibition
Whether or not these fears are really serious, the public’s reaction to disclosure of genetic information is. Fear of adverse consequences leads individuals to not undergo genetic tests; if an insurer discovers this genetic information, they might deny coverage or raise premiums. However, if individuals are not taking advantage of this new technology, then all the research and knowledge acquired will be for naught. Indeed, “unless large numbers of people utilize genetic information, the vast investment of public and private resources in genomic research may never be recouped.” A legislative prohibition on the use of genetic information, however, would remove this fear, and the benefits of predictive genetic testing can be utilized.
The constitutional right to privacy dictates that every individual has the right over the control of his own body and what is done with it. “The constitutionally protected privacy interest in avoiding disclosure of personal matters clearly encompasses medical information and its confidentiality.” Genetic information is part of the individual’s body, and so the individual should control whether or not this information becomes known to others; this privacy should be protected. “[T]he fundamental moral value of human autonomy [is that an individual should have a] right to control the dissemination of information about her body, just as she has a . . . right to oppose unauthorized invasions of her physical integrity.” Additionally, the fact that any kind of DNA sample, no matter from what part of the body it was collected from, can be used in genetic testing creates a potential for invasiveness into privacy that has no parallels.
Additionally, every individual should have the “equal opportunity to achieve her potential and her life’s goals,” and therefore society has the “moral obligation to redress barriers to equal opportunity.” This implies that it is unfair for individuals to be disadvantaged because of factors beyond their control, like DNA. “A person’s success in [life] should be determined, not by the [pure luck] of the natural or social lottery, but only by the extent to which she uses her talents and opportunities.”
However, this means that the unlucky should get some “compensatory treatment” at the expense of others who are more fortunate. The issue really boils down to who should bear the cost of the unlucky in society – the unlucky individuals or society as a whole? The problem is that our society generally allows bad luck to disadvantage one class of people and those who get the luck of the DNA draw receive many advantages. For example, intelligence is a significant marker of who we are and what advantages we can get in society . Yet, it is determined by our DNA and our genes. So what makes health insurance different?
Access to health insurance can be distinguished by arguing that it is a necessity in our society. Due to “unpredictable health risks” and “highly specialized, expensive health care,” health insurance is a necessity. It provides the only means of protecting people from financial loss due to their bad luck in genes that makes them more prone to certain illnesses. However, this is a hypocritical argument. The problem is that health insurance cannot be a necessity when such a large portion of our population has either very limited or no access to it.  Since health insurance is commercially provided, the system leaves nearly 45 million Americans uninsured. “[B]ans on genetic discrimination provide a benefit to those members of society [who have health insurance], while failing to provide [the same benefit to everyone else].”
Another argument is that genetic discrimination is very similar to morally condemned invidious discrimination such as race because it is also based on genetic differences. This goes back to the argument that since these are immutable traits – a characteristic that we have no control over – it seems unfair to discriminate based on it. In United States v. Carolene Products Co., the Supreme Court held that there is a special role in protecting “discrete and insular minorities.” The idea is that certain groups need this protection because of a long history of invidious discrimination. However, there has been no history of such discrimination based on genetic traits. Race is a discrete class more because they are “social constructs, not biological realities,” unlike the concrete information provided by genetics. Still, there is a fear that there could be such discrimination, so it might be better to curtail misuse of genetic information before it causes any harm.
However, there have been some instances of such discrimination in our history, even though not as consistent as racial discrimination. For example, in the early part of the 20th century the genetic information of individuals who suffered from genetic defects, such as mental diseases and epilepsy, was used as a reason to sterilize these individuals. In 1927, the Supreme Court upheld a statute that allowed the superintendent of a mental institution to sexually sterilize a “feeble-minded” woman. In a notorious opinion, Justice Holmes stated that:
We have seen more than once that the public welfare may call upon the best citizens for their lives. It would be strange if it could not call upon those who already sap the strength of the State for these lesser sacrifices, often not felt to be such by those concerned, in order to prevent our being swamped with incompetence. It is better for all the world, if instead of waiting to execute degenerate offspring for crime, or to let them starve for their imbecility, society can prevent those who are manifestly unfit from continuing their kind. . . . Three generations of imbeciles are enough.
Additionally, carriers of the sickle-cell gene were stigmatized and discriminated against as a result of that genetic information. The problem there was that the majority of individuals who possessed this gene were African-Americans, and it was evident that the genetic trait was only used as a proxy to discriminate on the basis of race. Genes are not only shared among family members, but also among “ethnic or racial communities, and other groups with a distinctive genetic inheritance.” Therefore, it is possible that without a prohibition against the misuse of genetic information, there can be a serious potential for harm.
Legislative Prohibition on Genetic Discrimination
The Genetic Information Nondiscrimination Act of 2008 (“GINA”) was enacted to resolve these societal fears and to achieve two kinds of societal benefit: (1) to prevent misuse of genetic information, and therefore, to (2) encourage more genetic testing. In fact, Congress found that “[d]eciphering the sequence of the human genome and other advances in genetics open major new opportunities for medical progress,” however, “[t]hese advances give rise to the potential misuse of genetic information to discriminate in health insurance.”
GINA provides in part that:
A group health plan, and a health insurance issuer offering health coverage in connection with a group health plan, may not adjust premium or contribution amounts for the group covered under such plan on the basis of genetic information, . . . shall not request or require an individual or a family member of such individual to undergo a genetic test, . . . [and] shall not request, require, or purchase genetic information for underwriting purposes.
Additionally, GINA provides that:
A health insurance issuer offering health coverage in the individual market may not establish rules for the eligibility (including continued eligibility) of any individual to enroll in individual health insurance coverage based on genetic information, . . . [and] shall not adjust premium or contribution amounts for an individual on the basis of genetic information concerning the individual or a family member of the individual.
GINA not only prohibits use of genetic tests in the underwriting of insurance policies, but also prohibits family history of diseases or disorders, or genetic tests of family members. However, health insurers may still discriminate on existing conditions which are visible or from an individual’s personal history. GINA only prohibits the use of purely genetic information; it does not prohibit the insurer from considering the manifestation of a disease or disorder in an individual for the purposes of underwriting.  “Once the individual becomes symptomatic, the laws do not apply. [In some cases where the individual becomes symptomatic,] the insurance company can cancel the policy or increase rates 100 percent or more.” Individuals currently suffering from certain diseases do not have protection against the insurance industry.
A reason for this difference may be that predicting future illness based on genetic information is too imprecise and we would be discriminating against people for reasons that do not yet exist. However, when an individual is actually ill, the problem of adverse selection arises, and so insurers have a compelling reason to discriminate. Still, health care in this country is imperfect; not everyone has access to comprehensive health care and it is expensive to obtain individual health insurance. It seems unfair that only a certain portion of our population can get the benefit of this protection.
Also, GINA does not require insurers to cover particular tests or treatments, but denial of this kind of coverage may in effect be genetic discrimination. In Katskee v. Blue Cross/Blue Shield, the appellant had a genetic condition that put her at risk for developing breast and ovarian cancer, but she had not yet shown any symptoms, and her health insurer refused to cover a preventative surgery. Although in Katskee the court held that her genetic condition was an illness within the meaning of the policy, it depended upon what the insurance policy provided. Under GINA, there would be no requirement for the insurer to cover this type of treatment. Insurers could, for example, exclude from coverage preventative treatments. In terms of public policy, it is not beneficial to exclude this kind of treatment because preventative measures are preferable to allowing the illness to develop. However, requiring insurers to cover preventative services creates a risk of moral hazard, where policyholders will take every possible preventative measure, even if there isn’t a serious risk of illness.
GINA’s prohibition against genetic discrimination does not extend to life insurance; however, one can argue that life insurance is different from health insurance. First, health insurance is generally obtained by almost all who have access to it or who can afford it, while procuring life insurance is not as common. Therefore, those who do opt for life insurance tend to do so because of their own personal risk assessment. Thus, there is much more potential for adverse selection for this type of insurance. Second, health insurance has a high turnover rate, while life insurance policies are generally kept for longer periods of time. “[L]ife insurance underwriting is all about predicting future mortality, so genetic issues are much more relevant . . . . And, the potential is much greater with life insurance for adverse genetic tests to prompt someone to apply for more insurance coverage.”
The prohibition against discrimination infers that this genetic information requires special protection which is not afforded to other types of medical information. However, there is no “sharp line” between genetic and nongenetic medical information, but instead there is an overlap. “Genetic information and medical information are so intimately intertwined that they cannot be segregated legislatively or by regulation in any way that would prove operationally feasible.” The overlap exists because many health conditions are not caused solely by genetic or environmental factors, but rather a mixture of the two.
Additionally, any justification for the prohibition of genetic discrimination is just as relevant for other medical information. For example, the Gattaca fear of disclosure of genetic information is that we will be classified and discriminated against because of our genes. Similarly, nongenetic information, for example AIDS, creates the same type of discrimination, and may also be regarded as creating a subclass of the population because of the distinct stigmatization society creates against individuals who suffer from it. A reason for the enactment of GINA was that the public fear of genetic discrimination hinders the advancement of genetic research. Similarly, some people may avoid medical care for fear of discrimination, and this might hinder volunteers to participate in clinical studies that would advance knowledge of the particular medical condition. Another reason we are troubled by adverse consequences of the disclosure of genetic information is that this is something beyond our control. However, “[m]any environmental and sociological risks and pre-existing conditions include . . . elements outside of our control.”
The distinction between genetic and nongenetic information creates an inequality of insurance coverage based on the legislative proscription against the former. For example, A has a high risk of a genetic condition and B has a high risk of a nongenetic condition. Insurers can deny or limit coverage to B, but is prohibited by GINA from doing so to A. The problem is that there isn’t a real distinction between the risk of administering a policy to A or B. The only difference is that, by law, an insurer is able to discriminate against one but not the other.
Another inequality that may result from such legislation stems from the fact that “genetic risks transcend socioeconomic class,” while nongenetic risks “have sociological components related to poverty and environmental hazards.” Certain environmental hazards, such as sewage and hazardous waste sites, are disproportionately placed in lower-income communities. These environmental hazards, therefore, affect certain socioeconomic classes more than others. In contrast, the higher socioeconomic classes are more concerned about genetic discrimination because of the risk of losing or being denied insurance coverage. “[T]here is reason to be concerned about the social impact of a policy that only protects genetic risks, but does not protect the risks that most profoundly affect the poor and minorities.”
The Risk of Adverse Selection
Those who discover they are predisposed to certain diseases will disproportionately seek out health insurance, but because of prohibitions on genetic disclosure, insurers will not be able to classify those individuals as high risk and individualize their policy coverage and rates according to the risks. Insurers will necessarily have to increase premiums across the board to cover the cost of paying out to those high risk individuals. Then, the low risk individuals will decide it is not worth it for them to pay a high premium, and will leave the insurance pool. The insurance pool will then be composed of mostly high risk policyholders, and the ultimate outcome is that the insurer will fail; either the insurer will not be able to pay out as much as it is receiving in premiums, or it will have to charge such a high premium that no one will be able to afford it, and the market for insurance collapses.
However, there is no real risk of adverse selection right now in health insurance for three reasons. First, there is only so much health insurance coverage any one person can buy, and most people are already fully covered. For the most part, people obtain health insurance regardless of genetic predispositions because it is offered through employment or government programs. Additionally, “low risk insureds cannot leave the insurance market without forgoing health care.” Those who do not have access to health insurance in the same way and are unable to afford coverage on their own will not obtain insurance regardless of their health status. Second, the risk of information asymmetry has always existed and insurers have always been able to deal with them. Third, insurers do not consider genetic information important.
Until recently, genetic information was not available, and the insurance industry succeeded without this information. They had been able to combat adverse selection by using the individual’s personal medical history, current condition, and by excluding from coverage pre-existing condition. Insurers can still use these measures to curtail adverse selection. Also, most health insurance is sold by groups, usually through employment, where there is no individualized assessment of policies, but is rather very standardized.
Additionally, health insurers have not used genetic information, even before GINA prohibited it, so the prohibition does not change anything in the insurer’s practices. A study conducted on genetic discrimination found that “genetic discrimination by health insurers is very low or nonexistent,” and laws prohibiting its use “have had no discernable impact on actual genetic discrimination by health insurers.” After interviewing genetic counselors, the study found that “almost every [genetic] counselor and every patient advocate said they knew of no actual cases of health insurance discrimination.” In the situations where discrimination was found, it was “based more on existing symptoms than on predictive genetic information.” Yet, GINA does not prohibit the use of existing health conditions in the underwriting of insurance policies.
The study also found that “health insurers do not seek the results of genetic test information, and [have no history of] using presymptomatic, predictive genetic information.” One reason given was that health insurance companies “cannot afford to spend two months worth of premium trying to decide whether to write a risk or not.” Furthermore, it just does not make sense to consider a prediction of future illnesses for health underwriting because there is a lot of turnover in health insurance, since few people keep the same health insurance for long. Therefore, “[u]nderwriters try to assess only existing or prior health problems based on recent health care utilization because these are the most predictive of likely health care costs in the immediate future.”
The only reason there’s such a low risk of adverse selection is because the information is not regarded as important and necessary. As technology improves, however, genetic information and tests will become very accurate, which will then become much more relevant to medical underwriting. In addition, technological advancements will make genetic tests inexpensive, and therefore individuals will have easy access to this information. At this point, the legislative prohibition on use of this information will more likely lead to adverse selection. It is only normal that individuals will want to use information unknown to others for their own benefit. However, prohibition may cause insurance markets to fail because of the high risk of adverse selection.
The Utility of GINA
GINA was intended purely to alleviate fears of possible future discrimination and adverse consequences to individuals. Thus, the real reason behind the enactment of GINA is that, by alleviating the public’s fear of the consequences of genetic disclosure, individuals will be willing to undergo genetic testing which will further the goals of the Human Genome Project. That is, to completely understand the nature of our DNA, and to be better able to diagnose, treat and prevent genetic illnesses. However, it does not solve the bigger problem of ensuring fair health coverage for all individuals. Specifically, it offers no protection to individuals who most need health care – those that are currently sick. A universal health care plan would resolve these discrepancies, but our society does not yet seem welcome to this kind of socialism. Unfortunately, the United States is the only industrialized nation without a universal health care system. However, there are other health care reforms lurking in the near future that might help.
GINA is designed to benefit one class of people while denying these benefits to a class that needs the protection just as much, or perhaps even more. In this way, GINA can be considered an underinclusive legislation.  That is, the legislation does not include all classifications necessary to completely solve the problem, or more generally, to meet the purpose of the government’s interest. However, one can view the trend towards protection of genetic information as a stepping stone to more comprehensive protection.
It may be the case that the government does not have the resources to deal with the entire problem, or the legislature has concluded that it is not wise to have a certain policy. In these circumstances, the Supreme Court has noted that the legislature may adopt regulations “one step at a time,” which may only partially fix the problem. So although this legislation may seem unfairly underinclusive, it may be appropriate for the time being. Although “there seems to be an emerging consensus that universal coverage should be the goal, the political fallout of the failed attempts at national health care reform . . . has been pushing politicians to seek smaller, incremental solutions.”
Although the legislature recognizes the need to protect the public against unfair uses of genetic information, genetic information may become an important tool in risk assessment, and prohibiting its use may exacerbate a future problem of adverse selection. Since genetic information is currently imperfect, insurers probably do not need to worry about this prohibition yet. Additionally, since most health insurance is offered under group plans through employers insurers tend to use a more standardized application process, and genetic information (which would only be relevant in individualized assessments) is not considered.
However, health insurers may be faced with a dilemma in the future. The trend, as seen by GINA, is to incrementally take steps towards a more generous protection of medical information. If this happens, insurers will no longer be able to use informational assessment measures, such as personal medical history and existing condition, to combat the risks of adverse selection. There is a risk that the health insurance markets might collapse; however, if insurance providers still have a large pool of diverse insureds, their risks might be neutralized. Additionally, if government reform includes health care subsidization to help individuals pay insurance premiums, then more individuals will be able to afford it and will opt in even if they are low risk.
President Obama’s plan for health reform is to provide “affordable, accessible health care for all Americans, build[ing] on the existing healthcare system, and us[ing] existing providers, doctors and plans to implement the plan.” This just might work. If it does work, several problems will be solved: (1) there will be the protection of individual privacy of both genetic and medical information, (2) a low risk of adverse selection, so insurance companies can stay afloat, (3) there will be open consented-to disclosure of all kinds of medical information, because individuals do not fear negative repercussions, (4) the disclosure of this information leads to technological advancements in medicine and improvements in individual diagnosis and treatment, and (5) equal opportunities for all members of society to have access to adequate health care.
There are many reasons to want genetic information to be used in the underwriting of health insurance. The process becomes efficient in that individuals pay premiums equal to the risk they impose on the insurer. The insurance market will not be susceptible to adverse selection, thereby ensuring that health insurance will still be available. There is a concept of fairness, where there is an equitable distribution of risk.
However, full disclosure of information is not always the best policy. In this situation, the public’s fear of disclosure of genetic information leads to their nondisclosure, thereby precluding the benefits of such research. Additionally, there is a danger of discrimination as has been seen in the past century by the enactment of laws to sterilize “feeble-minded” individuals; this is effectively discrimination based on genetics since intelligence is a genetic trait. There is also concern over the confidentiality of genetic information. Our constitutional right to privacy encompasses medical information; therefore, this intrusion into our privacy requires special protection. Finally, science is not at the point yet where genetic information can accurately predict genetic illnesses. So the use of this information unfairly discriminates against those individuals who only have a genetic trait. Since they may never become ill, there is no need for insurers to classify them as high risk.
Congress responded to this dilemma by enacting GINA. However, GINA is imperfect. GINA still allows for many other kinds of medical information to be used by health insurers to discriminate against policyholders in the underwriting process. However, there is no difference between genetic information and other types of medical information. Additionally, GINA does not protect those in our society who most need protection – the sick and the uninsured. There is still much to be done to ensure that the protections of the government extend to all of society. However, by protecting our privacy and ensuring that we are not discriminated against on the basis of something we cannot control, GINA is a step in the right direction.
“If socialization of risk is viewed as an objective of insurance regulation, it at once alters the focus of the enterprise from one essentially private . . . to one which is essentially public, permitted to exist in private form only to the extent that it fulfills society’s demands.” There is a trend in public policy towards health reform, which may solve many of these problems. Although the effect on health insurers may end up drastic, if the right policies are put in place we may be able to offer health benefits equally among all members of society while keeping the insurance market strong.
 See Human Genome Project Information, http://www.ornl.gov/sci/techresources/Human_Genome/project/about.shtml (last visited May 10, 2009).
 Kourtney L. Pickens, Don’t Judge Me by My Genes: A Survey of Federal Genetic Discrimination Legislation, 34 Tulsa L.J. 161, 164 (1998).
 See Human Genome Project Information, supra note 2.
 See Colin S. Diver & Jane Maslow Cohen, Genophobia: What is Wrong with Genetic Discrimination?, 149 U. Pa. L. Rev. 1439, 1441 (2001).
 Jill Gaulding, Race, Sex, and Genetic Discrimination in Insurance: What’s Fair?, 80 Cornell L. Rev. 1646, 1665 (1995).
 See id. at 1665-66.
 See id. at 1666.
 Ronald M. Green & A. Mathew Thomas, DNA: Five Distinguishing Features for Policy Analysis, 11 Harv. J.L. & Tech. 571, 575 (1998).
 See Kenneth S. Abraham, How Insurance Works, in Insurance Law and Regulation: Cases and Materials 3, 3 (2005).
 See id. at 3.
 See id. at 3-4.
 Id. at 4.
See Kenneth S. Abraham, The Problem of Imperfect Information, in Insurance Law and Regulation: Cases and Materials 5, 6 (2005).
 See id. at 6.
 See id. at 6.
 See id. at 6.
 See Diver, supra note 5, at 1465.
 See Diver, supra note 5, at 1460.
 Gaulding, supra note 9, at 1674.
 See Diver, supra at 1460.
 Paul M. Schwartz, Privacy and the Economics of Personal Health Care Information, 76 Tex. L. Rev. 1, 8 (1997).
 Id. at 37-38.
 Id. at 20.
 Gattaca (Columbia Pictures 1997).
 See Synopsis for Gattaca, http://www.imdb.com/title/tt0119177/synopsis (last visited May 10, 2009).
 See id.
 Diver, supra note 5, at 1447-1449.
 Id. at 1442.
 See id.
 See id. at 1443.
 Id. at 1454.
 See id. at 1468-1469.
 Norman-Bloodsaw v. Lawrence Berkeley Lab., 135 F.3d 1260, 1269 (9th Cir. 1998).
 Diver, supra note 5, at 1445.
 See Green, supra note 12, at 576.
 Diver, supra note 5, at 1471.
 See id. at 1477.
 See id. at 1473-1474.
 Id. at 1473-1474.
 See id. at 1473-1474.
 See Gaulding, supra note 9, at 1692.
 See Chetan Gulati, Genetic Antidiscrimination Laws In Health Insurance: A Misguided Solution, 4 Quinnipiac Health L.J. 149, 154 (2001).
 Gaulding, supra note 9, at 1693.
 United States v. Carolene Products Co., 304 U.S. 144, 153, 58 S. Ct. 778, 784, 82 L. Ed. 1234, 1242 (U.S. 1938).
 Diver, supra note 5, at 1480.
 See Genetic Information Nondiscrimination Act of 2008, Pub. L. No. 110-233, § 1, 122 Stat. 881, 882 (2008).
 See Buck v. Bell, 274 U.S. 200, 205, 47 S. Ct. 584, 585, 71 L. Ed. 1000, 1002 (1927).
 Id. (emphasis added).
 See Genetic Information Nondiscrimination Act of 2008 § 1, 122 Stat. at 882 (2008).
 See Diver, supra note 5, at 1476.
 Green, supra note 12, at 580.
 See Hall, supra note 64, at 95.
 Genetic Information Nondiscrimination Act of 2008 § 1, 122 Stat. at 881-882.
 Genetic Information Nondiscrimination Act of 2008 § 101, 122 Stat. at 883.
 Genetic Information Nondiscrimination Act of 2008 § 105, 122 Stat. at 893.
 See GINA: Information for Researchers and Health Care Professionals, http://www.genome.gov/Pages/PolicyEthics/GeneticDiscrimination/GINAInfoDoc.pdf (last visited May 11, 2009)
 Mark A. Rothstein, Genetic privacy and confidentiality: Why they are so hard to protect, 26 J. L. Med. & Ethics 198, 199 (1998).
 See GINA: Information for Researchers and Health Care Professionals, supra note 82.
 See Hall, supra note 64, at 110.
 See Suter, supra note 76, at 701.
 Id. at 702.
 See id. at 703.
 See id. at 705.
 See id. at 739.
 Id. at 744.
 See id. at 716-717.
 Id. at 719.
 See id. at 719-720.
 Id. at 721.
 See Diver, supra note 5, at 1456-1458.
 See id.
 See id.
 See id.
 See Mark Hall, Legal Rules and Industry Norms: The Impact of Laws Restricting Health Insurers’ Use of Genetic Information, 40 Jurimetrics J. 93, 117 (1999).
 Gaulding, supra note 9, at 1687.
 See Hall, supra note 64, at 117.
 See Diver, supra note 5, at 1466.
 Hall, supra note 64, at 98.
 Id. at 99.
 Id. at 102.
 Id. at 103.
 Id. at 104.
 See id. at 109.
 Id. at 109.
 See id. at 112.
 See Sonia M. Suter, The Allure and Peril of Genetics Exceptionalism: Do We Need Special Genetics Legislation?, 79 Wash. U. L. Q. 669, 681-682 (2001).
 See Diver, supra note 5, at 1455-1456.
 See Gulati, supra note 50, at 155.
 See Suter, supra note 76, at 722.
 New Orleans v. Dukes, 427 U.S. 297, 305; 96 S. Ct. 2513, 2518; 49 L. Ed. 2d 511, 518 (1976)
 Suter, supra note 76, at 724.
 Organizing for America: Health Care, http://www.barackobama.com/issues/healthcare/ (last visited May 11, 2009).
 Spencer L. Kimball, The Purpose of Insurance Regulation: A Preliminary Inquiry in the Theory of Insurance Law, 45 Minn. L. Rev. 471, 513 (1961), quoted in Gaulding, supra note 9, at 1689.
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