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Genetic Tests: Insurers Should Pay

Health insurance companies should foot the bill for genetic tests for diseases and other medical problems. Pro or con?

Pro: A Live Saver

Thanks to the Human Genome Project and billions of dollars spent in the private sector, we are acquiring vast information about the role genes play in diseases that can probably kill you. It is time to start using these data to expand the benefits already bestowed by genetic tests.

Today, health insurers and HMOs cover the cost of some genetic tests, especially those that can diagnose the hundreds of disorders (such as cystic fibrosis and muscular dystrophy) caused by mutations in a single gene. Many are reluctant, however, to pay for genetic tests that can identify persons at increased risk for such disorders as colon cancer and heart disease.

Why? Over the last two decades, fears of genetic discrimination have hobbled the field of genetic testing. Clinical geneticists and consumer groups have speculated that insurers will misuse the risk data. Further, insurers, doctors, and consumers haven’t learned enough about genetic testing to understand that many of the new tests are really much like a cholesterol count—not diagnostic but rather a source of information that can be used to modify risk.

First developed for phenylketonuria (a disorder that causes severe mental retardation unless infants are quickly put on a special diet) in 1962, newborn screening is provided to almost every baby in America for some 20 genetic disorders. The tests cost little and save lives by enabling diagnosis of rare disorders early to avert disaster.

Carrier testing (which identifies healthy couples at risk of conceiving a child with a severe disease) has greatly reduced the births of babies with Tay-Sachs disease. At-risk couples can seek testing and terminate affected pregnancies or consider adopting children. A few years ago a group at the National Institutes of Health recommended offering carrier testing for the gene responsible for cystic fibrosis, and the number of tests soared. Prenatal screening offers couples the option of looking for serious birth defects in the fetus. Insurance companies and HMOs routinely cover these tests.

Soon genetic tests will determine proper dosage of powerful drugs like blood thinners and antidepressants. Genetic factors influence risk for heart disease, diabetes, and Alzheimer’s disease. In the case of Alzheimer’s, there is at least one gene variant found in about 3% of the population that greatly increases the risk for the disease. Shouldn’t you have the right to know whether you are among the 3%?

Insurers have no grounds to argue that threats of genetic discrimination make the information too sensitive to acquire. The amount of documented discrimination is smaller than minuscule. Further, almost every state has a law that protects against misuse.

Third-party payers should embrace genetic information. Living to your fullest means pursuing a healthful life style, which you can do, and managing your genetic risks, which you can do only if you have been tested.

Con: Looking for Trouble

Instead of asking whether health insurance companies should cover genetic tests, let’s ask what exactly they would be covering if they did. Looking beyond the marketing and into the science, we’ll see that genetic testing is hardly as definitive as often assumed, making it difficult to use for preventative medicine.

Not long ago, we were told that learned men and women in lab coats would be able to look into our biological future, using DNA as a crystal ball. But after more research, we’re finding that DNA is not absolute. Rather, it works by probabilities and potentialities, and is affected by the environment outside of our cells. The promised crystal ball actually looks more like a murky lake.

During genetic tests, technicians look for markers that may indicate a presence of mutated genes associated with an illness. Then they can theorize about the likelihood that the medical problem will develop. For patients with long family histories of particular cancers, insurance company guidelines recommend paying for the tests because their results have proven more certain. Less clear-cut cases, on the other hand, mean too few actionable takeaways, too much ambiguity, and too little benefit to the patient to justify covering a test.

Just because a lab detects a marker for a potential condition doesn’t mean that the condition will manifest itself. Likewise, a clean test doesn’t mean that the genome is pristine. Epigenetic processes responsible for gene expression and silencing may yet activate a cancerous gene or silence a potentially troublesome one, turning the results of the genetic test on their head. What if patients want to take costly preventative measures against diseases that may never manifest themselves? Or spend years and financial resources preventing possible illnesses—just to develop something completely different?

If insurance covers these preventative efforts, how much money has the insurer spent on fighting the phantoms of patients’ concerns? And how much did premiums have to rise to cover all this preventative care based on conjecture? Insurers also worry that companies—wary of the expense ambiguous preventative procedures can entail—may decide not to cover employees based on results of genetic tests. Such genetic discrimination is bound to start court battles, taking a heavy toll on everyone involved.

We should not underestimate the difficulty of deciphering our genetic mechanisms. Until we learn enough to consistently predict potential conditions with 85% certainty or above and know how to effectively help prevent them, we’re asking insurers to spend money on a game of medical roulette and drive up our already high premiums.

Opinions and conclusions expressed in the Debate Room do not necessarily reflect the views of BusinessWeek,, or The McGraw-Hill Companies.

Reader Comments

Dr Coles

The government caused the entire problem with health care in America by oversocializing (with mandates) medicine to the extent it is not completive. The government allows a monopolistic pharmaceutical environment, and the FDA is a federal agency failing American citizens and needs be eliminated or completely reorganized; it's corrupt and is causing a major impact on the cost of health care in America--and we want to exacerbate the problem?


When it becomes cost effective, insurers will see the benefit of paying for genetic testing. That is, when getting the test will allow patients to maximize early detection of the actual conditions for which they have genetic markers. Early detection and treatment (and maybe a cure when available) should save insurers a lot of money in the long run.


Third-party payers have singe-handedly managed to shackle our current health-care system. So why would we even think they will attempt to embrace genomics as an opportunity to repair and restore what now lies in shambles? Greg's argument is nothing more than an open invitation for insurance companies to carry on as usual, which they will undoubtedly do if given the opportunity.


The two experts here are not talking about the same thing. Genetic testing using DNA often involves the speculative elements pointed out by the other writer and additionally, genetic defect (harmful genotype) may not always translate into disorder (harmful phenotype). However, newborn screening, e.g., for PKU or CF, has nothing to do with testing DNA but rather testing already materialized disorders. Newborn screening thus has unarguable socio-economical benefits.

Dr Personalized Medicine

Pretreat to prevent date of onset and reduce severity of disease, thereby reimbursing less and extending quality of life for patient; e.g., type II diabetes.

Individualize therapy to more appropriately treat responders (e.g. about 25% response rate to anthracyline chemotherapy in post-resection breast cancer patients) and reduce negative impacts to vulnerable variants (e.g. reduce bleeding risk in about 30% of patients on Warfarin).

Increase likelihood of approval and reduce development time and costs of new drugs for more focused populations by decreasing statistical noise from non-responders. This will reduce the overall burden to the health-care system by preventing overprescribing and reduced costs of development.

Expand personal health information to the genetic level for possible discrimination. No examples exist for genetic tests but this already happens for lifestyle choices (e.g. smoking, obesity).

Stockholders of Big Pharma would suffer economic losses through revenue reduction as blockbusters become nichebusters instead. Due to the long-term growth of this industry and its impact on the overall returns to the market plus enormous contribution to employment, this could have a negative effect on the overall economy.

Government, perhaps via Homeland Security, could mandate some kind of submission of samples for genetic data basing. The impacts, however speculative and imagineered as sinister, could be far-reaching but are equally unforeseeable today.
The use of genetic information for a variety of reasons is an inevitable aspect of the long-term future of humanity. To be proactive and consider the possibilities alongside the ramifications is prudent and appropriate. There is no decision about whether the practice will come but instead how, when, and with what benefits and caveats.


How about the utilization of tests to guide treatment in cases where the disease (phenotype) has already manifested itself. Surely the insurance companies should be willing to fund studies for the development of tests that indicate which drugs, at which dose will give the most benefit and even be applied most cost effectively (i.e. why pay for clopidigrel, when aspirin will do the job?)

Greg Fish

"So why would we even think they will attempt to embrace genomics as an opportunity to repair and restore what now lies in shambles?"

Just to clarify, there are genetic tests already approved and covered by insurance companies in the InterQual and M&R coverage guidelines as mentioned in the article. These are tests for certain cancer varieties and for disorders such as cystic fibrosis and Down Syndrome that have been vetted out and confirmed as highly effective. In light of these guidelines, insurance companies simply can't carry on as usual.

The biggest question about coverage is the conflict between geneticists and medical bureaucrats. Geneticists want to make those tests available so people can know what's in their genomes since even a tiny chance of developing a genetic disorder for you becomes a 100% certainty for one of your eventual descendants. Insurance companies want to know what will happen after the test is completed and the results are announced.

It's a standard science vs. business dilemma of great ideas pitted against questions of logistics and available resources to fulfill those ideas. I'm taking the position of the devil's advocate to address the goals of genetic science from a money standpoint.


Decisions are personal and should not be dictated by insurance companies or others. I successfully argued for coverage of genetic tests nearly 10 years ago so we could have another child (pay a little now or many thousands annually later). In the spring of 1999 we were blessed with a beautiful and healthy daughter (now 8.5 years). Her older sister is 12.5, born with a rare genetic disability that neither my husband nor I knew existed. Aside from the enormous annual costs we face every year to keep our oldest alive (worth every penny), her disorder stinks and when she's sick, she's sick and in agony. Now our families know the genetic risk (including our younger daughter who's a carrier and will need to be screened before having children herself).

Bottom line: The vast majority of us are not trying to choose our kids' gender, eye color, intelligence, etc. but rather simply informing ourselves about very real and scary life-threatening illnesses, especially those that greatly diminish the quality of life of those affected (and their families).


Carrier testing (which identifies healthy couples at risk of conceiving a child with a severe disease) has greatly reduced the births of babies with Tay-Sachs disease. At-risk couples can seek testing and terminate affected pregnancies or consider adopting children. A few years ago a group at the National Institutes of Health recommended offering carrier testing for the gene responsible for cystic fibrosis, and the number of tests soared. Prenatal screening offers couples the option of looking for serious birth defects in the fetus. Insurance companies and HMOs routinely cover these tests.

By the way, regarding my earlier post: My husband was screened for Tay Sachs before we married in 1993 (in the clear). No other tests were available. Today there are many. For those interested, please look at the following for information (your genes don't care if you are religious or what your ethnic background is. Knowledge is power). The links below are from Genzyme but there are many resources out there for people to research on their own.

General Prenatal screening info:

Ashkenazi Jewish Panel:

Familial Dysautonomia Screening (part of above):

Sickle Cell screening info:


Con: "not good for now."

With the economy being the way it is today, I don't think it is the right time to bring that into play. We are already paying high insurance premiums. As we all know, insurers are going to be the ones who have to pay for this service. How are we supposed to survive?


Having read the comments and arguments, I have to go with Con. My reason goes to the core of insurance, and how rates are figured. An insurance company uses statistics to develop its prices vs. risk. To expect those same companies to not use the data they would get from such tests for pricing would be expecting a lion to eat tofu when there is a chunk of fresh antelope next to it. The impact on an industry that is already hypercompetitive and the issues with the health industry today don't need the magnitude of troubles this type of testing would cause.

Hector Lugo

Every incumbent holding office in Congress that was reponsible for earmarks this last emergency budget session should be voted out of office. Bank officers and CEOs should pay fines and jail time for any mismanagement of their companies. Only when we put the fear of God in these people will there ever be real change for all of us.


There are pros and cons to this issue. Mainly, the insurance companies could require you to get a gene test to find any pre-existing conditions you currently have or from your family history, then deny you coverage and blacklist you. Think about it.


@ Dr. Coles: I'm just as tired of the lousy job government does as I'm tired of people calling for government to butt out. We have no other governing body we can turn to. We've all just seen where private business will take us. They'll burn down our society and our culture, as long as they can make a buck off it. The best we can do is try to clean goverment up--maybe start voting for intelligent people with some shred of integrity, instead of just voting for whoever promises to serve your current self interest.

If government screwed up on regulating something (most of the time due to industry lobby), we have to vote people who will do it right on the next go.

To get back to the subject: I believe we should progress with the testing. Make it ubiquitous and cheap; it'll pay off in knowledge, worldwide leadership, new jobs. And we can add laws as needed to prevent insurers from denying people based on genetic testing.


The central theme here is money. Having an insurance company pay arbitrarily for testing makes no economic sense. Only on a case-by-case basis is testing merited, because for the vast majority of gene signatures and mutations, there are no proven interventions. When the cost-benefit analysis properly demonstrates positive results from a change in lifestyle or early introduction of medical therapy that would not be made without the test, then and only then should that test be reimbursed.

Dr. Reilly suggests that a person with elevated risk has "the right to know." Sure, but having the right to know is completely unrelated to whether a payer should be reimbursing for that information.

To the conversion of blockbusters to nichebusters comment:

This concept is actually a solution, not a problem. There is ample evidence that biomarker-triaged trials are cheaper, shorter, and have lower variance, equally higher likelihood of success, and therefore approval and therefore revenue.

The only real problems are that 1) the FDA is just not able to adapt to high-value molecular diagnostics quickly enough to allow fully integrated drug-biomarker trials; and 2) Big Pharma has no common perspective or level of sophistication on the use of companion diagnostics in clinical development.


Granted, genetic tests are young and still being perfected, but eventually we should be able to opt for these tests in the same fashion that we opt for prenatal testing. As an insured, I know that DNA is not predictable, but I would like to know my odds and my children’s odds.

The problem with the health care system is that there is not enough preventative care. We need to focus more on stopping the causes along with the effects. We spend too much time bandaging the bullet holes in the health care system, as it bleeds to death, when all we really need to do is give it a bullet-proof vest.

I've never been screened for any type of disorder in my life, but if I knew that I had a 45% chance of genetically contracting something, I would get regular screenings. If we could catch genetic disorders in their early phases, we could mitigate these risks or even prevent them all together. This would not only save my life, but also the insurance company would save a ton of money. And if that health insurance company also provides my life insurance, they would save even more money, and I would be less of a risk to them.

Insurance companies will never go for an idea like this unless mandated to do so. They love high risk patients. High risks allow them to charge higher premiums for the whole group, and that means more cash in their pockets. They will continue to do the bare minimum, cover only the oldest and cheapest procedures, and raise premiums on the less fortunate.

Personalized Health Medicine

Insurance companies do not need to be part of the genetic testing that we as consumers perform. They don't need to know what our genetic makeup is, because if they do, then they will start charging higher premiums to people with a positive indication.

Also, I agree that preventive care is given too little attention in the U.S. Even after we have such advanced technology as genetic testing, it is being underutilized because people want insurance companies to pay for the costs. But realize that they will have access to all your information if you go through your insurance companies.


Chemical makers should foot the bill for this testing, because they are the ones changing our genetic make-up. There are now 60,000 in our food supply.

Gustavo Tellez

No way. My genetic information is mine. If I allow a company to pay for the analysis needed to obtain my genome, then that company could claim that they have legal rights to the results of the analysis. Thus, they would have a leg to stand on to record my genome and do with it what they would.

Fundamentally, individuals should have the right to do with their genome as they please, as it is their property. It should be clearly spelled out when a genetic test is conducted: who owns the resulting information, and what may be done with it.

In my opinion, this is a version of "human intellectual property rights."


First, let's make it illegal for insurance companies to cherry-pick policyholders and make it so that insurance companies must cover pre-existing conditions. Let's just make it so that everyone pays the same premium regardless, because everyone has something wrong with him. Then let's compile family medical histories and test in cases where there is a strong indication of being a carrier (or worse, manifesting the disease). Persons who come from closed adoptions should have the most tests, since they don't have any relatives to ask.


Well, I am facing this issue now as my sister was diagnosed BRCA 2 positive. I have elected to pay for the test and be tested without my carriers' knowledge. Of course, if I do have the mutation, it will require some radical surgery. So, I am kind of stuck, because there is no way I can pay for a double surgery on my own. The only way to ultimately keep this knowledge from my carrier is to test negative. Genetic testing is always a catch-22. I also would recommend a meeting with a counselor first and finding out the laws in the state where one resides. A specific law has been passed federally that addresses some of these questions, but it will not go into effect until 2009--too late for some of us.

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