The local paper had a story on the unanimous support of the
Senate and a supposedly conservative President in favor of forbidding insurance
companies to use DNA testing to set higher rates for people who are more likely to
become ill:
Employers would also be prohibited from using such information in hiring
and firing.
...
"It simply isn't right that the very information which may lead to a
healthier life and the prevention of a disease may also lead to the
denial of health insurance, or higher rates," said Sen. Olympia Snowe,
R-Maine, who has led a years-long effort to find a bipartisan consensus
on the legislation.
...
Snowe cited a case where 32 percent of the women offered genetic testing
for breast cancer by the National Institutes of Health declined because
of fears of health insurance discrimination.
...
The administration has indicated its support for the bill.
Insurance companies would be barred from using people's
genetic information or family histories to deny medical coverage or set
premiums under a bill passed 95-0 by the Senate on Tuesday.
This seems to misunderstand the function of insurance, which is not to provide charity
to sick people but to transfer risk from a more risk-averse party to a less risk-
averse party for a fee, to their mutual benefit. If I know I am going to get cancer and
I then buy health insurance, that is not insurance, but me getting a special deal. The
other customers of the insurance company end up subsidizing me via higher rates.
There actually is a possible good reason for banning use of information, but it's complicated enough that I doubt the Senators know it. It is based on adverse selection.
Suppose Smith and Jones know that one of the two is going to get cancer and have to pay $100 in medical bills. They could agree in advance to split the cost 50-50, no matter who got the cancer. Both would be better off, in expectation, because each now loses a sure $50 instead of having a gamble between $0 and $100. If someone came along and offered to tell them in advance, before they made their deal, who it was who was going to get cancer, they would clap their hands to their ears and refuse to listen. If they knew in advance, that would destroy the possibility of making a deal to split the cost.
But that is not quite the DNA testing situation. The story above does give a reason why the Senate might want to ban DNA testing altogether. But the Senate allows the testing, and then the people with high health risk can buy extra insurance. So it is more as if Smith can get DNA testing, without Jones's knowledge, and then go to Jones and offer to share the costs. Smith would only do this if he knew he was the one who was going to get cancer, so Jones would reject the deal.
Note, too, how companies are to be prevented from using the information. What justifies this intrusion on liberty? Conservatism and free-market economics may have won the day on the simple socialist idea of government ownership (well-- that is not clear either), but it has given way to the newer socialistic idea of government control. Really, this is almost worse. Suppose the government (a) owned and operated a steel company, by its choice of the board of directors; or (b) passed regulations telling a steel company what to do whenever it pleased. Which is worse? In case (a), the government's distate for subsidizing losses at least provides a check on bad policy.
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