As we sequence more genomes, mine more data, and conduct more studies, we’ll find a lot more of these connections. Eventually, genomic testing will be a powerful predictor of future illness. And it raises the potential that young people will get themselves tested and then purchase insurance based off the result. So those with a clean genomic result might go for a cheap catastrophic plan, while those with a high risk of developing pricey illnesses will opt for more comprehensive insurance.
The result would be, in insurance terms, an “adverse-selection death spiral,” as the healthy opt out of expensive insurance, the sick opt into it, and premiums spin out of control.
“For all of human history, humans have not had the readout of the software that makes them alive,” Larry Smarr, a member of the Complete Genomics scientific advisory board, told The New York Times. “Once you make the transition from a data poor to data rich environment, everything changes.”
The idea that personal genomics might render insurance irrelevant makes some logical sense. The only problem is that it oversells the science of prediction in biology, and underestimates the role of randomness in disease outcomes. As longtime commenter with the original handle “biologist” long ago observed highly inbred lineages of model organisms in a “controlled” environment still exhibit a fair amount of random phenotypic variation. Yes, a non-trivial minority of people will find out that they have a high risk of developing a given disease early on enough in adulthood that the acturial tables imply that they’re uninsurable. But even those with “clean” results should probably still purchase some insurance plan to protect against ‘tail risk’. People who don’t smoke do get lung cancer, and people without a family history of heart disease and cancer do get heart disease and cancer.
But this idea that personal genomics will bankrupt health insurance is persistent. Why? I think it’s because some people have strong normative objections to the way health insurance works in the USA. I say this because many of the same people who espouse the power of genomics in predicting disease outcomes might be far more wary of such ‘genetic determinism’ when it comes to other sorts of life outcomes.
This is not to deny that personal genomics does not pose some problems for insurance. Misha Angrist recently told me that it seems clear that people who are aware of their APOE status are purchasing disability insurance on the sly. The only issue here though is that even those without the APOE alleles which heighten risk of mental deterioration earlier than the norm have a non-trivial likelihood of needing insurance against unexpected outcomes.