Modern technology has advanced so much that it is now possible to predict whether a person is susceptible to contracting certain genetic diseases such as sugar diabetes and cholesterol related diseases.
This means that people can go for genetic testing to see whether they run the risk of contracting these diseases. They can then either go for preventative surgery, if it is possible to have such surgeries to prevent the disease, or they will be able to take out the relevant insurance prior to contracting the disease in order to get financial protection.
But while these advancements are good for society, they have the potential to have a significant impact on the insurance industry. A recent article published by the online website of the New York Times shows the impact that this is having on the US industry.
Entering into a battle of wills
The report shows that a few years ago, the costs of genetic testing were in the region of $1 million for a full genome. This has significantly decreased to the point where a patient will currently pay up to $1 000 for a similar test.
While this has become more accessible to the public, many people are avoiding the tests because of a major omission in federal law that bars employers and health insurers from seeking the results of genetic testing.
That leaves many patients who may be at risk for inherited diseases fearful that a positive result could be used against them.
However, some patients will only know about a disease through this type of testing. But concerns about the insurance implications are putting off patients from testing which could ultimately save their lives.
A surgical resident in Pennsylvania, who has a 50% chance of carrying a genetic mutation that causes Cadasil, a fatal neurological disorder that afflicts his mother, wants to get tested, but is opting against it because he wants to apply for life and long-term-care insurance.
Are insurers hiding behind the law?
There are some patients who are still eager to seek the assistance offered by the insurance industry. However, many are concerned about the possibility of paying higher premiums or being denied coverage altogether.
The report shows that just three states — California, Oregon and Vermont — have broad regulations prohibiting the use of genetic information in life, long-term-care and disability insurance.
It adds that at least one insurer, the Northwestern Mutual Life Insurance Company, asks potential customers in Massachusetts about genetic testing; and stipulates that refusing to share results could lead to a declined application or a loaded premium.
Jean Towell, a spokeswoman for the company, says applicants are told out of fairness that insurers have the right to decline coverage if any medical information is omitted. “We think it’s best to have it all spelled out in black and white so buyers can make a well-informed decision,” she said.
The law gets even more ambiguous. If an insurance company asks for medical records, which they are entitled to do, they can use any genetic information within those records to price a policyholder’s risk. On the other hand, if an employer asks for medical records, they have to tell the hospital to withhold any genetic information.
Creating a new approach to medical treatment
This does tip the scales heavily in the insurers favour and one cannot blame the public on becoming sceptical when it comes to treatment and full disclosure to doctors. However, at times these tests are necessary, particularly when it comes to cancer.
This is changing the way in which patients are approaching doctors and surgeons asking them if it is possible to withhold this information from their medical records altogether. But they do not realise that, if action is going to be taken on that information, it needs to appear.
Doctors are also looking at ways in which they can offer their patients increased protection. One way would be to keep a separate file which would list any relevant genetic information. This would not be handed over to insurers.
But the report adds that even if such results can be kept private, patients could be penalized. A life insurance broker for Accuquote, an online service that compares insurance policies, said that if an applicant carried a highly predictive marker for a disease like Alzheimer’s and failed to disclose it, it would be regarded as guilt by omission.
Would this be a challenge in the South African industry?
The South African insurance industry is often compared with the US and UK insurance industries. But one must wonder whether the challenges faced in the US market will have an impact here.
A big factor that one must consider is that the Financial Services Board is implementing key pieces of legislation which will protect the consumer. This will largely be achieved through its Treating Customers Fairly (TCF) guidelines which companies are expected to abide by, even though it is not yet officially been passed into law.
Principle One of the TCF guidelines say that there needs to be clear information given to policyholders. If an insurer is going to use genetics to price its risk or reject cover, it needs to tell this to policyholders. The Third Principle is fair treatment being central to company culture. The FSB would have to determine whether insurance companies would be acting unethically if they acted like the insurers described earlier in the article.
But perhaps the most important protection that policyholders will have will be that offered by the Protection of Private Information Bill, which is due to be passed this year. Currently, insurers are allowed to ask for medical information when considering signing on a policy, but will this status quo be maintained in the future? And if it is maintained, will there be exclusions imposed on them?
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