The use of private health insurance, though better than no health insurance at all, has long posed serious problems for the American people. Given that the primary purpose of these corporations is to accumulate profits, they frequently resort to such tactics as denial of coverage to those whom they consider to be at high risk of disease or
fraudulent denial of claims. That, combined with the rapidly rising cost of health care, has resulted in a
rising wave of health care related bankruptcies.
The rapid rise in scientific knowledge in the field of genetics, with the consequent proliferation of genetic testing procedures, though producing many benefits, also poses new dangers to the American public. One of the most serious dangers posed by the rapid rise of genetic testing is the potential for abuse by the health insurance industry.
Genetic discrimination by the health insurance industryThe Medical Information Bureau (
MIB) is a massive databank, comprising information on millions of U.S. citizens, used by America’s health insurance industry to check out medical information on its insured clients. The availability of genetic testing data has added tremendously to the amount of data contained by the MIB. What are their plans for the use of this information?
Denial of health care coverage to those considered to be at “high risk”Edwin Black, in his book “
War against the Weak: Eugenics and America’s Campaign to Create a Master Race”, explains that one use of genetic information by the insurance industry will be to use it to exclude additional people from coverage – those who are said to have “pre-existing conditions”:
Insurers increasingly consider genetic traits “pre-existing conditions” that should either be excluded or factored into premiums. A healthy individual may be without symptoms, or asymptomatic, but descend from a family with a history of a disease… Many in the insurance world argue that their industry cannot survive without such information, and the resulting coverage restrictions, exclusions and denials that would protect company liquidity.
The health insurance industry has been discussing these issues for some time now. In 2002 the American Academy of Actuaries released a paper titled “
The Use of Genetic Information In Disability Income And Long-Term Care Institutions”. In that paper, the health insurance industry puts forth an argument for why it
needs access to genetic data:
Insurers are concerned that if they were prohibited from obtaining genetic information from the medical records of applicants, then those applicants would know more about their genetic predisposition than the insurance company, and more substandard and uninsurable individuals would qualify for insurance. Premiums could not be adjusted adequately to cover the deterioration of the insured population because the higher prices would drive out the healthy…. The increase in premiums would further reduce the number of health policy holders and could eventually cause the insurers to become insolvent.
This process is already occurring. An article in
Risk Management, titled “
Genetic Discrimination: A New Frontier”, found that 22% of families participating in genetic disorder support groups had been denied health insurance and 13% had been fired from their jobs because of their genetic status.
Denial of claims based on accusation of fraudMore ominous than refusing coverage is the denial of health care claims based on the presumption that the insured individual knew or should have known about the genetic status of his/her ancestors or family members. Edwin Black explains:
Some insurers may also want genetic data so they can use the information to rescind insurance, claiming that an individual fraudulently or even inadvertently omitted ancestral information from an application – even if the insurance claim is unrelated to the medical condition.
Black goes on to describe the
case of a Quebec man who was killed in a car crash. The man carried a gene for the disease myotonic dystrophy and knew that his father had that disease, but he omitted that information from his life insurance application. The man’s widow was denied her life insurance payment based on the genetic information.
Black notes that the Quebec precedent is spreading to other countries and also expanding to include cases even where the insurance applicant was unaware of the genetic information, on the basis that he should have known about it.
My commentary on insurance industry use of genetic testing to deny coverage or claimsThe insurance industry claims that they need genetic information on insurance applicants to prevent raising insurance premiums on healthy individuals. But think about it. They have expressed the intention of using the information to exclude from coverage people who are at “high risk”, based on genetic testing. Even if the excess risk is very small they can use the information to raise premiums on individuals found to be at “high risk”. This will undoubtedly increase their profits. Does anyone believe that they will balance these actions by decreasing health insurance premiums on individuals found to have a stellar genetic record? That seems highly doubtful. The end result will be more Americans with either no health care coverage or more expensive health care coverage. The health insurance industry will profit, and large segments of the American public will suffer for that.
The ability to deny claims for individuals who have paid insurance premiums for years holds even more potential for abuse. The propensity of health insurance companies to deny coverage for any questionable reason they can find is well known. With the availability of genetic test results they will be able to expand their excuses for denial of coverage. Those denials may often involve cases where the insured individual had no knowledge of the test results when s/he applied for insurance. No matter. How many people have the money or the time to fight insurance companies?
The health insurance companies argue and whine that their inability to use genetic information for these purposes may cause them to become insolvent. Well, I have an answer to that argument: Go ahead and become insolvent. WE DON’T NEED YOU.
How Obama’s health insurance plan will prevent genetic discriminationThe
Obama health care plan addresses the problem of genetic discrimination in two ways.
First, it prohibits private insurance companies from excluding individuals from coverage based on pre-existing health conditions. If insurance companies can’t exclude individuals based on pre-existing conditions, then it’s difficult to see how they could deny claim payments based on pre-existing conditions. But let’s suppose that they somehow manage, based on their disproportionate wealth and power, to get away with those things from time to time.
The more important way in which Obama’s health care plan prevents genetic discrimination is that it directly offers its own health insurance to any American to who wants it. This plan is similar to Medicare, except that it applies to the whole U.S. population, not just the elderly and the disabled. To make sure that all Americans can easily afford this public health insurance plan, individuals, families, and small businesses will be offered tax credits on a sliding scale.
How McCain’s health insurance plan will prevent genetic discriminationMcCain’s health plan will absolutely NOT prevent genetic discrimination. John McCain is an anti-regulatory ideologue. Consequently, he is opposed to the idea of requiring private insurance companies to abide by regulations that prohibit discrimination against individuals with pre-existing illnesses. Just three weeks ago McCain bragged about this when he said in an article titled “
McCain: We Should Deregulate Health Insurance Like we Deregulated Wall Street”:
Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation.
Nor does McCain provide an alternative to private health insurance, as Obama’s plan does.
Comparison of coverage: The Obama vs. the McCain planOf course, one of major reasons why a good quality national health insurance plan is needed in the United States is to reduce the number of Americans who are not covered by health insurance, which currently
stands at about 46 million.
McCain offers a $2,500 tax credit to individuals and a $5,000 tax credit to families to help them cover the cost of health insurance. However, at the same time his plan will eliminate the tax break for employer provided health insurance, which of course will cause many employers to drop their employee health care coverage. An
article by Paul Krugman estimates that this will result in about 20 million Americans losing their health care coverage. And McCain’s $5,000 tax credit for families will hardly enable them to purchase health care insurance, since the average family plan is currently about $12,000 annually. The end result, according to virtually all analyses of McCain’s health care plan, is that any increase it produces in health care coverage will be marginal if not zero. Furthermore, as Krugman explains:
The total number of uninsured Americans might decline marginally under the McCain plan – although many more Americans would be without insurance than under the Obama plan.
But the people gaining insurance would be those who need it least: relatively healthy Americans with high incomes. Why? Because insurance companies want to cover only healthy people, and even among the healthy only those able to pay a lot in addition to their tax credit would be able to afford coverage.
The increase in coverage resulting from Obama’s plan is debatable, but universally recognized to be substantially greater than with McCain’s plan. Some people will undoubtedly choose not to purchase health insurance despite the tax credits they receive for doing so. I’ve found estimates that his plan will result in
47% to
98% coverage of the currently uninsured, including
all children. Krugman doesn’t provide a precise number, but summarizes the Obama plan thusly:
Barack Obama offers incremental reform: regulation of insurers to prevent discrimination against the less healthy, subsidies to help lower-income families buy insurance, and public insurance plans that compete with the private sector. His plan falls short of universal coverage, but it would sharply reduce the number of uninsured.
SummaryJohn McCain’s health care plan fails abysmally to produce any substantial benefits to the American people. It could even result in a net increase in the percent of uninsured Americans because of its taxing of employer-provided health care benefits, which will undoubtedly cause many employers to drop their employee health care plans.
Furthermore, McCain’s plan does nothing to discourage discrimination against the unhealthy or people who have or whose ancestors or family members have various genetic risks. Indeed, McCain’s plan probably will
encourage such discrimination, by deregulating health insurance beyond its current lack of regulation.
And yet the cost of the McCain health care plan is only marginally less expensive than the Obama plan.
Krugman summarizes McCain’s plan by saying, “In short, the McCain plan makes no sense at all, unless you have faith that the magic of the marketplace can solve all problems. And Mr. McCain does”
Under the Obama plan, health care in our country will become substantially more affordable, health insurance coverage will substantially increase, and discrimination against the unhealthy or the genetically unfit is likely to disappear. With time, the private health insurance industry very well may disappear, as the American people come to recognize that government-sponsored, Medicare-like health insurance is far superior to private for-profit insurance.
Some may object to my cavalier attitude towards the fate of our health insurance industry, especially my saying that it doesn’t matter if they become insolvent, and saying WE DON”T NEED YOU. What about the people who lose their jobs if the private health insurance industry disappears? Well, their experience in the health insurance industry should qualify them for jobs with the government health insurance program. Why should the American people be held hostage to a for-profit industry that has so frequently defrauded them with respect to the health care that they so desperately need. They can either shape-up and offer a product comparable to Medicare, or they can disappear. As Barack Obama said in his
second debate with John McCain, “
Health care is a right”, not a privilege or a responsibility, as John McCain said.
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