The Genetic Insurance Racket

Will genetic testing destroy the insurance market?

The U.S. Senate passed the Genetic Information Non-Discrimination Act of 2005 on February 17, 98 to 0. This proposed law, which now goes to the House for consideration, would prohibit health insurers from requiring or using information from genetic tests when issuing health insurance or setting premiums.

Although advocacy groups like the Coaliton for Genetic Fairness can point to a small set of recycled horror stories (and they are truly horrible), there is little evidence that genetic discrimination is a pervasive problem requiring swift federal action. For example, the Congressional Budget Office estimated that the number of people who, without the Genetic Information Non-Discrimination Act, would be denied health insurance based on genetic tests is about 1,000 per year. Nevertheless, polls show that nine out of 10 Americans favor legislation to prohibit genetic discrimination in health insurance and employment.

And progress in genetic testing is happening very rapidly. In 2003, the U.S. Centers for Disease Control estimated that genetic tests had been developed for about 1,000 health conditions and that 600 of them were available for clinical use. Most of these tests look at single gene variations that contribute to disease risk. For example, physicians can now test for gene variations that predispose people to breast cancer, Alzheimer's disease, deep vein thrombosis, and colon cancer. And in less than a decade, physicians are expected to be able to offer patients a full scan of all their genes for less than $1,000.

However, most common diseases—diabetes, heart disease, Alzheimer's—are not the result of single genes interacting with the environment. For example, a genetic test might show that you and a neighbor have two different versions of the same gene, differing only by single base pair of DNA. These variations in base pairs are called "single nucleotide polymorphisms" (SNPs, pronounced "snips"). SNPs often travel in packs called haplotypes—sets of closely linked genes that tend to be inherited as a unit. Although more than 1 million SNPs have been identified so far, researchers have discovered that most human genetic variation is the result of a small number of SNPs, and that these genetic variants cluster into a limited number of haplotype combinations. Your haplotype version might make you less likely to suffer heart disease than does your neighbor's version. Therefore, future genetic tests will look for common haplotypes that predispose various people to heart disease or diabetes or different mental illnesses.

Researchers believe that understanding these differences will lead to better medical outcomes. For example, the Connecticut biotech company Genaissance has developed tests for response to the asthma drug albuterol. These tests check patients for genetic variations in a particular receptor on cell surfaces. Genaissance found that they could divide patients into four different haplotypes, two of which simply did not respond to albuterol. One day doctors will be able to test for these haplotypes and avoid prescribing albuterol to those who will not benefit from it.

In December 2004, the U.S. Food and Drug Administration approved the first diagnostic test allowing physicians to test patients for genetic differences in the way they metabolize various drugs for cardiac disease, psychiatric diseases, and cancer. The new AmpliChip Cytochrome P450 Genotyping Test is made by Roche Molecular Systems, Inc., of Pleasanton, California. That test analyzes one of the genes from a family called cytochrome P450 genes, which produce liver enzymes that break down certain drugs and other compounds. People are born with different forms of this gene, and some metabolize certain drugs more quickly or more slowly than average, or in some cases not at all. This difference in the rate of drug metabolism may explain why some people respond well to anti-depressants like Prozac, whereas others do not. With this test in hand, physicians will be able to tailor dosages for many drugs to fit each patient's genetic profile.

By 2015, pervasive genetic testing will also show that everyone is predisposed to some kind of disease or other—there is no perfect genome. "Since all of us have dozens of genetic glitches that put us at risk for disease, we all have a reason to be concerned about the possible misuse of genetic information, warns Francis Collins, director of the National Human Genome Research Institute.

Will increasingly extensive genetic testing produce some sort of insurance crisis? Will Americans protected by the Genetic Information Non-Discrimination Act of 2005 have themselves tested and then rush out to buy gold-plated insurance if it turns out that they are particularly prone to some nasty disease? Will this adverse selection then drive relatively healthy people out of the health insurance market as premiums skyrocket to cover those who know that they are at greater risk of genetic disease?

Perhaps.

Proponents of nationalized health care have already argued that the advent of genetic testing means that the United States will have to scrap private insurance and adopt some kind of government health care system. But that doesn't necessarily follow. If every person has genetic glitches, then it seems that insurance companies should be able to come up with general rates that apply to the majority of people. In other words, insurance rates will come to be set on a community basis rather than on an individual basis. Ultimately, it may well be that pervasive genetic testing will tend to push policymakers to adopt proposals for mandatory health insurance, but there's no reason such insurance must be run by the government.