Locking the sick out in the cold. (implications of genetic testing inobtaining medical and life insurance)

(New Statesman (1996))

Without proper regulation, genetic testing could lead to some people being unable to secure their own futures. Will the state step in?

This week, 19 months after the House of Commons' select committee on science and technology requested it, the Association of British Insurers has published a code of practice on genetic testing. It is the product of the first round of a commercial and philosophical battle over whether insurers should be allowed to discriminate on the basis of genetic test results.

Under the code of practice, life insurers "will not ask people to take genetic tests when applying for life assurance". However, they will demand access to preexisting test results, although they say they will not take them into account for mortgage-related life assurance policies worth up to [pounds]100,000. This is best described as a holding operation. First, it has nothing to say about the introduction of genetic testing for other types of policy, such as private medical insurance, long-term care insurance or life assurance policies not related to a mortgage. Second, the code of practice will only apply for two years, after which it will be reviewed "so as to take account of current and likely future genetic developments".

Some firms, such as Standard Life, feel the code does not go far enough. Peter Robertson, Standard Life's assistant general manager, says the firm is prepared to go much further to allay public concerns about genetic tests. "For the foreseeable future we will not seek the results of any genetic tests. This applies to all types of insurance, including life, critical illness and income protection cover. We believe this will not have a significant effect on our claims experience."

That view goes against the grain of the rest of the industry, though. Most insurance firms are reluctant to deny themselves access to any data that might be useful. A life assurance firm normally pools premiums paid by the many to pay the claims of the few. Individual uncertainty combined with group predictability makes it worthwhile for individuals to insure, yet possible for insurers to make profits. Up to now rates have, in the main, been set according to a few broad criteria, such as the amount of cover required and the customer's age group, and, in some cases, medical reports. About 95 per cent of those who apply for life assurance pay a standard rate, 4 per cent pay more, and 1 per cent are rejected.

But that is changing. As more actuarially relevant information emerges, it is becoming possible to define more distinct risk pools and assign individuals to them more accurately. Virgin Direct, a telephone insurance service, is one firm leading the trend.

Rowan Gormley, Virgin Direct's managing director, explains: "Life insurance started off with different rates for men and women, then it introduced smoker and non-smoker status. We are taking a step further. We have five types of non-smoking status, and ten for drinking. We want to charge as close as possible to the actual risk. The old way of doing it is on the way out because we can undercut most firms for most people."

If firms such as Virgin succeed in attracting some of the really good risks, such as healthy teetotallers ("preferred lives", in insurance- speak) by offering them discount rates, this has serious consequences both for other insurers and for those individuals who aren't so healthy. Competing insurers fear that if they, too, don't start to differentiate their policies according to individual risk - by offering discounts to the fit and healthy and bumping up premiums for the unhealthy - they may lose clients to other firms that do. In this commercial context insurers may have no choice but to become more intrusive, not only about lifestyle, but also about medical and genetic information.

Crude information about people's genetic predisposition is already available from family medical histories. But new genetic techniques may allow a more finely tuned assessment of the risk levels of different individuals, which can be used to offer differential access to, and customised pricing of health, life and unemployment insurance.

We are still a long way away from this in practice. Genetics will for some time yet remain an imprecise science. Newspaper reports that the "Alzheimer's gene" or the "breast cancer gene" have been found should be taken with a pinch of salt: geneticists are as susceptible as the next researcher to talking up their discoveries, so as to get their bankers off their backs or please their investors.

Very few diseases are "monogenic", that is, caused by a single genetic defect. Most involve mutations in several genes ("polygenic" conditions) or an interaction between genes and the environment ("multifactorial" conditions). The only genetic tests already possible are for rare monogenic conditions, in which it is easy to show a clear link between a particular gene and the resulting disease.

Huntington's disease is a monogenic condition. It is a fatal and incurable progressive neurological disorder that affects one in 10,000 individuals. A further 30,000 are thought to be "at risk" because they have a parent with the disease, so they might have inherited it (a 50 per cent possibility). Huntington's disease is a rare example of a case in which it is certain that anyone who has the gene will have the disease.

However, for most monogenic disorders the link is less strong. Two susceptibility genes (BRCA1 and BRCA2) have been found for familial breast cancer, which accounts for about 5 per cent of all breast cancers. Of those women who are found to have BRCA1 or BRCA2, 85 per cent will eventually develop the disease. In order to be confident that a particular individual will develop familial breast cancer, doctors need to compare that individual's BRCA 1 or 2 with that of a relative who has already developed breast cancer.

What this means is the test is of limited or no use to women without a family history of the condition. The lack of certainty about the genetic test also means that about 15 per cent of the women may be incorrectly assigned to risk pools.

Given these problems for monogenic conditions - in which the probability of getting a genetically based illness is relatively high - imagine how much more fiendishly complicated it becomes to work out the actuarial risk of an individual developing a polygenic condition, or one in which individual lifestyle also plays a role.

Even when doctors have got past the first obstacle of demonstrating that there is a strong statistical link between a gene and a disease, those who would wish to ascribe significance to the results face a further problem. Many people simply don't want to take the tests, however reliable they may be as a predictor of future health. Of those who are at risk from Huntington's disease, 10 per cent have chosen to have a genetic test to find out for sure. American research suggests that only half of those women most at risk of inheriting breast cancer have opted to take a genetic test. The big stumbling block seems to be that unless there are clear medical benefits to be gained from taking genetic tests, most of us would rather live (or die) in ignorance.

Thus there are clearly significant limits as to how far people can be pigeonholed and charged according to their genetic risks. However, this does not negate the fact that there are some genetic tests that will help to weed out the good risks from the bad. Which raises the all-important question: should those individuals who are found to be particularly bad risks because of their genetic make-up have to pay more for their insurance?

Spencer Leigh, an actuary from Royal Life, has a clear-cut answer to that. In a paper he wrote last year, The Freedom to Underwrite, he states: "Let's face it, underwriting is about that very unfashionable word, discrimination, although we call it selection. But a distinction must be drawn between fair and unfair discrimination. Fair discrimination is where a proposer's risk has been properly evaluated and is reflected in the premiums. Unfair discrimination is when equal risks are not treated equally."

It is pretty straightforward to accept this line of argument when it applies to, say, motor insurance. It seems fair enough that an individual who decides to drive a luxurious car recklessly should have to fork out more for his insurance. Similarly, it is uncontroversial that someone who smokes, or frequently goes sky-diving should have to pay more for life insurance.

But what happens when this hard-edged "actuarial fairness" is applied to the genetically unlucky? Some people with good family genes will see their premiums drop. Others who are not so lucky could face extremely high premiums, or even become uninsurable for a whole range of products, from medical insurance to life insurance. Onora O'Neill, a moral philosopher at Cambridge University, says: "Actuarial fairness seeks to place the costs of misfortune on the unfortunate, and this is ethically quite different from placing the costs of bad driving on bad drivers."

John Crane, an insurance broker who advises the Huntington's Disease Association, says: "If someone is diagnosed with Huntington's disease it is virtually impossible to get insurance. They would only be able to get a short endowment policy, not life cover." However, if someone is merely at risk, and has no signs of the disease, "the vast majority of insurers take the view that there is a 50/50 risk, and would impose a precautionary loading." If a genetic test then revealed that the individual would not get Huntington's disease, "it may be possible to have such extra premiums removed".

Were society to sanction genetic discrimination in private insurance there would be wider social consequences which we would face collectively.

Alastair Kent is head of the Genetic Interest Group, which represents a number of organisations whose members are affected by genetics. "You cannot look at this problem in isolation from social policy in general," he says. "If we are becoming an increasingly insurance-based society, then you need to recognise that there are some people for whom insurance is not an option. They want to be responsible, but may not be able to afford the extra premium."

Clearly some lines have to be drawn. The ABI's code of practice begins to do that, by ensuring that people should not be genetically disadvantaged in obtaining insurance cover to secure a basic need - a mortgage for a home.

Because the NHS (in theory, at least) provides a basic universal level of healthcare, the need to take out private health or long-term care insurance is seen here as less of a priority. This contrasts with the US, where private health insurance is the norm. Legislation outlawing the use of genetic information in setting premiums has already been passed in a number of states.

If, as the Conservatives want, private health insurance or long-term care policies are to become a standard means for dealing with ill health and old age, the problems faced by the minority of very high- risk people cannot be ignored. Some individuals who would like to be responsible and take out insurance may find that the private insurance market does not offer them the opportunity to do so.

Society has been willing to intervene before to limit the freedom of insurers to charge according to quantifiable risks. In The Freedom to Underwrite, Spencer Leigh recalls that "up to the mid-1960s offices asked proposers about their ethnic origins and even charged so-called racial extras. Following the Race Relations Act 1968, offices removed the additional premiums from existing contracts and resolved not to charge them for new proposals. No one would defend racial discrimination now."

As medical science enables us further to identify those who are at highest risk of illness, infirmity or disease, society may well need to step in again. That might mean forcing insurers to make a basic level of cover available. Or it might refocus our attention on how best to maintain a high standard of public welfare provision for those who, through no fault of their own, cannot get by without it.

COPYRIGHT 1997 Statesman and Nation Publishing Company Ltd. (UK)