Health Insurance

The Problem with Genetic Testing

Deciding whether to get tested for genetic diseases is a choice many people will face in the coming years.  By knowing whether or not you are more likely to develop a given disease, you may be able to change your health habits or seek earlier medical treatment.  In addition, genetic testing provides additional knowledge useful in deciding whether or not to purchase long term care insurance.  A paper on Genetic Adverse Selection reveals the following:

…the long-term care insurance ownership rate among those at genetic risk for developing [Huntingon’s Disease] (50 percent) is five times the rate of ownership in the general population (10 percent). Furthermore, among individuals whose genetic testing shows that they are 100 percent at risk to develop HD, 50 to 75 percent own insurance…

As more individuals gain private information about the likelihood that they will require costly long-term care, adverse selection may threaten the viability of private long-term care insurance, at least in its present form.

Emily Oster, Ira Shoulson, Kimberly Quaid, E. Ray Dorsey (2009) “Genetic Adverse Selection: Evidence from Long-Term Care Insurance and Huntington Disease,” NBER Working Paper 15326.

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