The End of Health Insurance-Part II

Genetic testing is medicine's iceberg. Right now, most of the consequences are out of sight. But just below the surface, there is an enormous problem lurking.
My prediction is that in the years ahead, genetic testing will gradually become more and more pervasive, and at the same time, our knowledge of the risk of disease associated with the results of those tests will become increasingly refined. The end result, I think, will be to drive out private health care insurance as we now know it. If legislatures pass laws banning the use of genetic screening data, insurance companies will protect themselves from the resulting asymmetric access to information by raising and raising premiums. Some may even go bankrupt because purchasers of insurance will be the more knowledgeable in the transaction. If, on the other hand, we allow the use of genetic data, many more
individuals will be left without coverage because they will be deemed too high-risk to warrant coverage at
affordable prices.

If this scenario of the future evolves in this way-and I feel very strongly that it will-there is, in my mind,
only one solution that can preserve the concept of health insurance: universal coverage. The idea behind
universal coverage is actually a very old concept, called community rating. In community rating, the
individual purchasing insurance is part of a large community and is insured based on the rate for the large
group. The basic premise is to spread the risk: Individual differences are averaged over that large lot. True
universal coverage would require every person to be covered by health insurance, from birth to death. The
cost of that insurance would then be based on the average risk of the national pool. Regional, gender,
ethnic and genetic differences would not be taken into account for the individual policy holder, but would
be factored into determining the risk of the national pool.

The government could provide the insurance, or
could allow multiple companies to provide policies
while requiring that every insurance company use
the same actuarial data for determining policy
pricing. The government could make the insurance
affordable to all through the use of tax credits or
other incentives for low-income individuals and for
children.

Dogmatic as I am in my belief that individuals should ultimately be responsible for their own health care
decisions, I see no other alternative. The information revolution will eventually drive out too many
consumers from the health insurance market to enable our present system to remain viable. Some may
even make the argument-difficult to refute-that our present situation, in which tens of millions are already
lacking health insurance, and institutions like Johns Hopkins are left to somehow provide them free care,
is already unviable. Moving to universal coverage presents many challenges, but also presents the
opportunity to bring back into the system the tens of millions of Americans who presently lack the
means to acquire health insurance. I believe that day is coming sooner than many people expect.

CHANGE
June 5, 2002
Volume 6, Number 11