Summary
The debate of uses of genetic information for insurance purposes unfortunately masks the underlying problem: namely, the failure or inability of Congress to address the failure of the US health care system to allocate risks and costs based on rational policy choices, rather than based upon the "luck of the draw."
Analysis
The debate over genetic information exemplifies how Congress has chosen to address -- or more accurately, to avoid addressing -- fundamental health policy issues. The putative rational for restricting uses of genetic information is to prevent discrimination in access to health care. Specifically, Congress presumably (and legitimately) accepts the premise that individuals should not be denied access to health care (via employment and insurance coverage) on the basis of the individual's health care risk profile.
The premise, however, iis ncomplete. Assuming, as seems reasonable, that genetic information (like other material information) would improve the efficiency with which health care services (including prevention) are allocated, restrictions on the disclosure and use of such information are likely to engender indeterminate (but possibly substantial) unnecessary health care costs. The inevitable consequence of insuring "high risk" individuals is to increase the health care costs of individuals with low risk.
Standing alone, the health care subsidy tacitly provided to high risk individuals as the result of mandated non-discrimination is not objectionable. Indeed, the need to assure (through insurance regulation), or provide (through governmental health care programs), a health care safety net for individuals facing exceptional health care costs can be considered a fundamental tenet of social justice and obligation of government.
The problem with addressing problem through legislation prohibiting discrimination in allocating health care (based on genetic information or other factors) is that it randomly, rather than rationally, determines
who will be responsible for providing the health care safety net to high risk individuals and ignores the substantial risk and likelihood that employers and insurers will cheat (by finding pretexts for excluding high risk employees and insureds). Further, no justification is ever offered (or may be possible) for requiring some employers and insurers disproportionately (and indeed randomly) to bear the social costs of providing the health care safety net to the persons likely to need it most.
To illustrate the point, assume that two identical businesses having 10 employees produce widgets. One of the 20 employees divided between the companies has a high risk of incurring extraordinary health care cost and ultimate confronts such costs. Further, assume (consistent legislation restriction discrimination based on health care risk) that both companies have made employment decisions without regard to individual health care risks. Obviously, the business having the bad fortune to draw the high risk employee will ultimate face costs (and potentially substantial costs) not shared by its competitor. If such costs are sufficiently high, moreover, they could become the principal reason that one of the businesses succeeds and the other fails.
But does it, as a policy matter, make sense for one of the two companies disproportionately to bear the social cost of providing the safety net for all 20 of the employees? It seems unlikely. On a broader scale, the analysis suggests that the random allocation of costs is likely to have a far greater affect on small businesses than large ones, simply because large employers will inevitably have a greater ability to spread costs.
Unfortunately, a meaningful solution to this random assignment of costs may be politically unpalatable. Two possibilities that come to mind are
(i) nationalized (single payor) health care or (ii) direct goverment aid to high risk employees (and/or their employers). Either approach could prevent the random allocation of social costs to business that are honest (i.e. businesses that comply with antidiscrimination legislation) but unlucky.
