Genetics and Health Insurance

By Alissa Johnson
National Conference of State Legislatures

Over the last decade states have become increasingly engaged in the genetics and health insurance debate. The laws in 47 states that restrict the use of genetic information in some types of health insurance stand as a testament to the concern and interest of state legislators with regard to this complex, yet important, issue.

Geneticists continue to make rapid strides in the application of science to the development of new treatments for rare disorders and common diseases, such as diabetes and heart disease. Today, genetic tests can screen or test for characteristics associated with more than 1,000 diseases, and the number of genetic tests available undeniably will continue to grow. As a result, state legislators likely will remain involved in the development of public policy for genetics and health insurance. Future issues for policymakers in this area may include gaps in health insurance discrimination protections, unintended consequences of existing laws, and access to and coverage of genetic services.

Discrimination Protections

The majority of genetics and health insurance laws—with the exception of laws that address coverage of newborn screening and rare childhood genetic diseases—focus on public perceptions that health insurers will use genetic information to deny coverage or charge higher rates based on genetic information or genetic test results. Some observers argue that without these protections, individuals may hesitate to access genetic services or participate in clinical trials. However, some insurers contend that, particularly in the case of individual insurance policies, genetic information may allow them to improve underwriting, decrease adverse selection—or insurer losses as a result of an applicant's failure to disclose health information—and ultimately lead to more affordable insurance.

Federal Action. In 1996, Congress addressed the use of genetic information for group health insurance in the Health Insurance Portability and Accountability Act (HIPAA). Under HIPAA, insurers providing health coverage for a group of 50 or more individuals may not deny an applicant as a result of a health status-related factor, including genetic information. However, employers may restrict benefits or coverage or charge higher premiums for like individuals. The law also prohibits pre-existing condition exclusions for group health insurance as a result of a genetic predisposition to a particular condition. Congress has considered repeatedly¾but has not passed¾legislation to provide further protections against genetic discrimination in health insurance over the last several years.

State Action. State legislatures have seen a flurry of activity over the last decade with regard to the use of genetic information in health insurance. Laws in 47 states restrict the use of genetic information to determine rates or eligibility in group or individual health insurance plans or both. The protections vary, with some states requiring actuarial evidence to use genetic information, while others prohibit the use of genetic information entirely.

Future Issues in Genetics and Health Insurance Policy

To date, most policymakers have concentrated on the development of public policy to address genetic discrimination. However, with initial efforts to curb discriminatory practices in place in most states, the debate over genetics and health insurance is expected to turn toward secondary concerns, such as gaps in discrimination protections and unintended consequences of existing laws. In addition, as genetic technology becomes available to more people, legislative activity in the area of access to and coverage of genetic services may gain momentum.

Amendments to Existing Laws. Policymakers may revisit existing laws as a result of gaps in discrimination protections or the identification of unintended consequences. For example, in the absence of state law, employees in small group health insurance plans and individual policyholders may face discrimination based on genetic information. In addition, employees who belong to self-insured plans, which are used by most large employers, also may be subject to discrimination based on genetic information. These plans, however, and other employer sponsored welfare benefit plans are subject to federal rather than state regulation as a result of the federal Employee Retirement Income Security Act of 1974.

State legislators also may find that the scope of “protected genetic information” as defined in current statutes is too broad or narrow, thereby resulting in unintended consequences. It is arguable whether genetic information is a fundamentally different type of medical information or whether all medical information—in some way—is genetic. For this reason, constructing a definition of genetic information that places the intended restrictions on health insurers and other affected entities is difficult. For example, a broad definition of genetic information may be construed to cover routine urine analysis and may place unreasonable burdens to protect this information on health care administrators. This demonstrates how the definition of protected genetic information can produce different degrees of protections and may at this same time affect the insurance market, public health agencies, researchers and health care professionals in different ways depending on whether certain types of information are included. The definition of genetic information may cover genetic test results of individuals or family members, family history, information about genetic testing, inherited characteristics, or asymptomatic and presymptomatic conditions.

Access to and Coverage of Genetic Services. At present, state laws with regard to access to and coverage of genetic services are primarily limited to newborn screening and childhood genetic diseases. No state requires health insurance coverage of genetic testing for adult onset disorders, such as breast cancer, which may cost more than a thousand dollars. However, the introduction of bills related to coverage of testing for or treatment of particular genetic conditions or genetic services are becoming increasingly more common. In fact, in 2004 the New Mexico legislature mandated that individual and group health insurers cover alpha-fetoprotein IV prenatal screening to detect genetic abnormalities of the fetus. Legislators may want to take into account the cost of genetic testing, the frequency of a genetic condition in the population, the potential benefit to individuals or families being tested and other issues when considering whether to mandate insurance coverage for various genetic tests. Finally, as genetic services are increasingly at the disposal of those who can afford them, legislation to address access to genetic technologies for low-income populations may become more prevalent, although affordable access to these services may still be in the distant future.

Selected Reference

National Conference of State Legislatures, Blue Ribbon Panel on Human Genetic Technologies Genetics Policy Report: Insurance Issues, Denver: NCSL, 2001.

Contacts for More Information

Alissa Johnson
NCSL-Washington, D.C.
enetic Technologies Project
(202) 624-5400
alissa.johnson@ncsl.org

Centers for Medicare and Medicaid Services. http://www.hcfa.gov/medicaid/hipaa

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