States develop regulations to limit use of genetic info in LTC insurance
August 23, 2012 2 Comments
My colleague Bob Cook-Deegan sent this article on states developing LTC insurance regulations restricting the use of genetic markers to underwrite private LTC insurance policies. The background is the hole in the Genetic Information Non Discrimination Act (GINA) of 2008, which did not ban the use of genetic information to underwrite or risk adjust long term care insurance policies/premiums. It has always been unclear to me if this was an oversight, or purposeful. Below is a partial snapshot of a table showing state regulations regarding the use of genetic information in the sale of LTC, disability and life insurance (link to full table, compiled by the Cancer Legal Resource Center):
Some states have moved to regulate the use of genetic information in LTC insurance, while others have not (North Carolina has not).
I did some work with Bob and colleagues from Boston University showing evidence of people using genetic information to behave in a manner consistent with adverse selection. Generally, the use of genetic information is thought to harm the individual whose genetic information may be used and that is the big idea behind GINA 2008, but I think that in voluntary insurance markets with rare uptake like private LTC insurance, there is an argument to be made that the entire risk pool is harmed with one-sided risk information. The key is which notion of “fairness” makes the most sense to you in a given market or context. The “you can’t pick your genes” notion, or the “actuarially fair premium is the only way to increase market share of a rare type of insurance notion” idea. The first is the most common, but I think the second may apply in private LTC insurance markets (which are falling apart in any event).
One of the worse by-products of the debate over the ACA was the labelling of the CLASS long term care provisions as simply a deficit reducing gimmick. Long Term Care is the forgotten policy, that will reliably rear its ugly head any time you want to do something like move toward premium support in Medicare or undertake any Medicaid reform. In short, Republicans really seared the ground for government efforts to jump start private insurance markets in the way they attacked CLASS, and they desperately need something besides the status quo in LTC (Medicaid pays for half the nation’s nursing home costs) to bring about their preferred big ideas in health reform.
Politics aside, the question remains: how will we insure against LTC? The baby boomers are coming….
update: clarified post by noting the LTC insurance market is voluntary; though forced risk pooling would have fixed CLASS and made it workable