5 ms·

Why aren't the health insurance companies pleased? Doesn't early detection save them money?

by nodata 13y ago

fsckin 13y ago
Did you read the article? >23andMe’s tests, designed to tell people if they're at risk for certain health conditions, could lead to an increase in care--necessary or not--which insurers could end up covering
- deleted 13y ago
  [deleted]
ghshephard 13y ago
When I see questions like this, I often wonder if the person asking the question is from Canada (or some other country with a halfways sane health insurance system) Many people (most?) would not have purchased health insurance when they were young and healthy, and they certainly would never purchase long-term care insurance. Those people who get Health Insurance typically either get it as part of a Group Insurance Plan from a company (in which case, they insurance company gets a nicely mixed up group of healthy and unhealthy people). With systems like 23andMe - otherwise healthy people now start loading up on various kinds of insurance, with a greater chance that the Insurance Company will have to pay out on the policy. It's somewhat like someone having advance notice of an arsonist in the neighborhood loading up on fire insurance. No guarantee that you will use it - but a much better chance than average.
lennel 13y ago
once the tech is solid I am 100% sure health insurance companies will ask (probably not mandate due to human rights) their customers to do this and give them a financial incentive as such.
yummyfajitas 13y ago
Genetic information that the insurance companies cannot use to price insurance leads to adverse selection. If insurance companies were permitted to use (and demand disclosure of) genetic tests, it wouldn't affect them. Consider a world without GINA/other regulations and with simple actuarial pricing of insurance. Say you have a 1 in 100,000 risk of a disease costing $10k before a genetic test. After the genetic test, you risk is either 1 in 1,000,000 (if negative) or 1 in 10,000 (if positive). The insurance company would charge you $1.10 for a policy if untested, $11 for a policy if tested positive, and $0.11 for a policy if tested negative. These policies result in a 10% profit per person (ignoring admin costs, etc). If you lie about getting tested, that's grounds to revoke your policy. As a result of GINA, people can get tested but the insurance company can't price insurance accordingly. As a result, the people with a negative test will drop coverage while people with a positive result will buy it, and prices will have to go up. If everyone behaved this way, then P(disease|buys insurance) = 1/10,000 in spite of the fact that P(disease)=1/100,000. Prices will rise to $11. Price increases will reduce the quantity purchased (resulting in lower profits) and result in political/regulatory pushback.
- nodata 13y ago
  Thanks. So why will the law change prevent this problem? I could send my saliva abroad to be tested.
- jonknee 13y ago
  This is just fake posturing by insurance companies, their risk is unchanged in the post-ACA marketplace. Policymakers aren't all stupid, this scenario is exactly why having health insurance is now a requirement. As you noted, it's quite risky to both cover all pre-existing conditions and not have a mandate.
  - yummyfajitas 13y ago
    Not everyone will buy insurance even with ACA (I don't plan to, now that cat coverage is illegal) and genetic tests can cause people to select Platinum vs Bronze plans (or whatever the exact categories are).
    - jonknee 13y ago
      It's not perfect yet because true universal coverage was not politically viable (even this giveaway to private companies--formally the GOP's desired solution--was politically unacceptable to the GOP). Choosing plans will happen annually, it doesn't take a genetic test to figure out you'd save money with another plan. Why aren't you going to get coverage? If you mean catastrophic coverage, the exchanges have them if you are young (under 30) or poor. It's not a terribly smart plan to have now that the other plans are available, but to each his own: https://www.healthcare.gov/can-i-buy-a-catastrophic-plan/ https://www.healthcare.gov/can-i-buy-a-catastrophic-plan/ If you're not poor you really should buy insurance, besides the obvious health benefits you're going to be paying 1% of your household income as a penalty in 2014, 2% in 2015 and 3% after that. Many people would pay more in penalties (and get nothing in return) than they would for getting insurance, it's a no brainer.
      - yummyfajitas 13y ago
        Your own link shows catastrophic plans are not really catastrophic plans - they cover all sorts of non-catastrophies like preventative care, a therapist, maternity, etc (https://www.healthcare.gov/what-does-marketplace-health-insurance-cover/ https://www.healthcare.gov/what-does-marketplace-health-insu...). It's moot since I'm over 30. In any case, I was never able to figure out what insurance would cost me, since the website doesn't work. Also I only live in the US part of the year, and it's unclear which state I'm even allowed to buy insurance from (I have no US address right now). I'd certainly be paying for months of care I couldn't use since you can't buy month to month. Lastly my income is low right now since I'm building a startup, so 1% won't hurt me much.
sentenza 13y ago
No, you have it wrong. Early detection _generates_ them money, since they can mark up your insurance fees. Whoever reads this, be careful before having your DNA tested. In some countries (as, for instance my native Germany) you have the legal obligation (!) of sharing any relevant results with insurers before buying insurance.

Why aren't the health insurance companies pleased? Doesn't early detection save them money?

by nodata 13y ago

Why aren't the health insurance companies pleased? Doesn't early detection save them money?

Did you read the article? >23andMe’s tests, designed to tell people if they're at risk for certain health conditions, could lead to an increase in care--necessary or not--which insurers could end up covering

deleted 13y ago
[deleted]

ghshephard 13y ago

When I see questions like this, I often wonder if the person asking the question is from Canada (or some other country with a halfways sane health insurance system) Many people (most?) would not have purchased health insurance when they were young and healthy, and they certainly would never purchase long-term care insurance. Those people who get Health Insurance typically either get it as part of a Group Insurance Plan from a company (in which case, they insurance company gets a nicely mixed up group of healthy and unhealthy people). With systems like 23andMe - otherwise healthy people now start loading up on various kinds of insurance, with a greater chance that the Insurance Company will have to pay out on the policy. It's somewhat like someone having advance notice of an arsonist in the neighborhood loading up on fire insurance. No guarantee that you will use it - but a much better chance than average.

lennel 13y ago

once the tech is solid I am 100% sure health insurance companies will ask (probably not mandate due to human rights) their customers to do this and give them a financial incentive as such.

yummyfajitas 13y ago

Genetic information that the insurance companies cannot use to price insurance leads to adverse selection. If insurance companies were permitted to use (and demand disclosure of) genetic tests, it wouldn't affect them. Consider a world without GINA/other regulations and with simple actuarial pricing of insurance. Say you have a 1 in 100,000 risk of a disease costing $10k before a genetic test. After the genetic test, you risk is either 1 in 1,000,000 (if negative) or 1 in 10,000 (if positive). The insurance company would charge you $1.10 for a policy if untested, $11 for a policy if tested positive, and $0.11 for a policy if tested negative. These policies result in a 10% profit per person (ignoring admin costs, etc). If you lie about getting tested, that's grounds to revoke your policy. As a result of GINA, people can get tested but the insurance company can't price insurance accordingly. As a result, the people with a negative test will drop coverage while people with a positive result will buy it, and prices will have to go up. If everyone behaved this way, then P(disease|buys insurance) = 1/10,000 in spite of the fact that P(disease)=1/100,000. Prices will rise to $11. Price increases will reduce the quantity purchased (resulting in lower profits) and result in political/regulatory pushback.

nodata 13y ago
Thanks. So why will the law change prevent this problem? I could send my saliva abroad to be tested.
jonknee 13y ago
This is just fake posturing by insurance companies, their risk is unchanged in the post-ACA marketplace. Policymakers aren't all stupid, this scenario is exactly why having health insurance is now a requirement. As you noted, it's quite risky to both cover all pre-existing conditions and not have a mandate.
- yummyfajitas 13y ago
  Not everyone will buy insurance even with ACA (I don't plan to, now that cat coverage is illegal) and genetic tests can cause people to select Platinum vs Bronze plans (or whatever the exact categories are).
  - jonknee 13y ago
    It's not perfect yet because true universal coverage was not politically viable (even this giveaway to private companies--formally the GOP's desired solution--was politically unacceptable to the GOP). Choosing plans will happen annually, it doesn't take a genetic test to figure out you'd save money with another plan. Why aren't you going to get coverage? If you mean catastrophic coverage, the exchanges have them if you are young (under 30) or poor. It's not a terribly smart plan to have now that the other plans are available, but to each his own: https://www.healthcare.gov/can-i-buy-a-catastrophic-plan/ https://www.healthcare.gov/can-i-buy-a-catastrophic-plan/ If you're not poor you really should buy insurance, besides the obvious health benefits you're going to be paying 1% of your household income as a penalty in 2014, 2% in 2015 and 3% after that. Many people would pay more in penalties (and get nothing in return) than they would for getting insurance, it's a no brainer.
    - yummyfajitas 13y ago
      Your own link shows catastrophic plans are not really catastrophic plans - they cover all sorts of non-catastrophies like preventative care, a therapist, maternity, etc (https://www.healthcare.gov/what-does-marketplace-health-insurance-cover/ https://www.healthcare.gov/what-does-marketplace-health-insu...). It's moot since I'm over 30. In any case, I was never able to figure out what insurance would cost me, since the website doesn't work. Also I only live in the US part of the year, and it's unclear which state I'm even allowed to buy insurance from (I have no US address right now). I'd certainly be paying for months of care I couldn't use since you can't buy month to month. Lastly my income is low right now since I'm building a startup, so 1% won't hurt me much.

sentenza 13y ago

No, you have it wrong. Early detection _generates_ them money, since they can mark up your insurance fees. Whoever reads this, be careful before having your DNA tested. In some countries (as, for instance my native Germany) you have the legal obligation (!) of sharing any relevant results with insurers before buying insurance.