
Taking an Ancestry Test Could Make It Harder to Buy Life Insurance - Jerry2
http://cbslocal.com/2018/01/18/taking-ancestry-test-makes-buying-life-insurance-harder/
======
LinuxBender
This was already happening in 1994. I brought this issue up to my squadron
commander regarding DNA samples the military was attempting to gather from
everyone. He said, "What, are you afraid we are going to clone you?" To which
I said, "No sir, you should be afraid if you cloned me." and we both had a
chuckle because we both know I was right.

I explained that insurance companies had already been denying claims for
people laid up in the hospital based on "pre existing risk" that they might be
at risk for getting cancer or becoming an alcoholic.

He had me submit a FOIA request which bought me some time. It went all the way
to Al Gore. I received boxes of paperwork that essentially amounted to "The
Chief Medical Officer can decide what to do with DNA information and how it is
managed." That bought me enough time to hit my four years and get out without
having to challenge them in court. I never gave them any samples and I do not
regret my actions.

------
jbattle
(US perspective) I've wondered if for-profit insurance as we know it can
survive changes in advances in actuarial science & related fields.

As I understand it, the entire concept of insurance is based around gathering
relatively large groups of people with a solid understanding of their
_average_ risks for certain types of loss. Given the averages hold accurate
over time, those that need a payout can get one, and the insurance company
makes money in aggregate.

However, the better the insurance companies can understand our risk profiles
as _individuals_ (going well beyond age/sex/smoking/etc/etc/etc) - eventually
(in theory) a motivated insurance company is going to be able to determine
that I have a 90% chance of developing Serious Syndrome X while you have a 97%
chance of developing Minor Issue Y.

Today we might get put into the risk pool. But as the science advances, the
risk pools can be cut into finer and finer (and more accurate) risk pools. Why
should a profit-seeking insurance company insure me past some point when the
data strongly indicates i'm going to need drastic and expensive intervention.

It seems like the three ways to avoid this are: 1\. "Advances" like the one
mentioned here don't turn out to have enough predictive power and insurance
continues to operate much as before 2\. Some people just can't get for-profit
insurance, at least not for health coverage (I'd think accidents will always
remain much harder to predict than e.g. heart disease). Pushing them into some
kind of not-for-profit 3\. Regulation forces blinders on to underwriters
essentially saying "actuarial science advances to here and no further"

~~~
klodolph
I don't think that's how risk pools work in the first place.

The idea is not to put people with similar levels of risk in the same pool.
The idea is to make the pool as large as possible, charge everyone for their
expected cost + a margin, and then pay out everyone for their actual costs.

It's the law of large numbers at work here. Take the mean value of a large
number of variables with high variance and you end up with a mean that has low
variance.

Not only is it normal for people with condition X to be in the same pool as
condition Y, but this is a good thing because the costs for people with
condition X are less correlated with the costs for people with condition Y,
and this reduces risk in the pool. For example, if you have a pool that only
contains people with condition X, and then it turns out that a commonly used
medication prescribed for condition X has horrible side effects, then that
single problem is disastrous for the entire pool.

> Why should a profit-seeking insurance company insure me past some point when
> the data strongly indicates i'm going to need drastic and expensive
> intervention.

Because you pass laws that make it illegal for insurance companies to deny
coverage on this basis, and then you turn around and pass laws to keep the
pool healthy enough for insurance to still be profitable. Or you just
nationalize it.

~~~
LeifCarrotson
> _The idea is not to put people with similar levels of risk in the same pool.
> The idea is to make the pool as large as possible, charge everyone for their
> expected cost + a margin..._

As a consumer who is fortunate enough to get life insurance at the "Super
Preferred" low-risk rate, I would prefer be in a small pool that excludes
people with higher actual costs. That's an economic preference, not moral,
though my morals are not bothered by using the system as designed.

As long as insurance companies are free to offer plans that admit only really
healthy people and exclude people with higher actual costs, my plan will be
cheaper. Really healthy people will drop out of the larger pool and into the
cheaper pool. The larger pool will, as a result, get more expensive. And the
people remaining in what's effectively the shallow end of the pool will be
offered a "Preferred" rate that's more expensive than super preferred but less
than the large pool.

Eventually you end up with small risk pools, with the least insurable,
highest-risk and highest actual cost customers unable to buy affordable life
insurance. If you're a 20-year-old obese diabetic who smokes and has a family
history of cancer, and the actuarial table says there's a 50% chance that your
50-year $1M policy will have to pay out, your premiums before a margin are 1M
* 50% / 50 / 12 = $833/month. That's not really affordable, even if it would
be wise for our unhealthy friend if he or she has dependents. My super-
preferred policy costs me $21.25/month.

I empathize with the plight of the uninsurable. Given my voting history on
health insurance issues, I would probably vote in favor of a law that limited
segmentation and would bump my premiums to, say $50/mo and would offer life
insurance to the $833/mo individual at the same rate. But I'm not going to
jump from my pool into a more expensive pool by myself if that signal will
fall on deaf ears.

~~~
Jedi72
"I sympathize with their problem but I won't disadvantage myself just to help
them"

------
maxxxxx
This is starting to be crazy. There is almost nothing you can do without
having to worry about what some other party may do with your data. Walk in the
street and have a video taken that's then processed and analyzed. Buy
something and probably hundreds of companies will know about it.

In this particular case the insurance company should not be able to request
data from the past. If they want any data they should order tests themselves
and only use that data.

~~~
JadeNB
> This is starting to be crazy. There is almost nothing you can do without
> having to worry about what some other party may do with your data. Walk in
> the street and have a video taken that's then processed and analyzed. Buy
> something and probably hundreds of companies will know about it.

I'm with you on this paragraph …

> In this particular case the insurance company should not be able to request
> data from the past. If they want any data they should order tests themselves
> and only use that data.

… but you lose me here. By this logic, it seems like car-insurance companies
shouldn't be able to look at my driving history, but should have to administer
me a driving test themselves. This would clearly make premiums skyrocket, and
I don't think is the right solution.

~~~
_jal
Exactly. There is no way to make that work without ending up with a pile of
absurd results, or results that are "right" but for legally contorted reasons.

The answer (to this narrow question[1]) is to not do business with shops like
23andme, who are horrible gossips. Find a service that actually respects you
and your wishes if you want a test.

Admittedly this will become harder as testing becomes part of medical care.
But telling your doctor not to tell the insurance company what's going on
would never fly anyway.

[1] To the broader questions of medical privacy, well, burning the private
insurance industry to the ground and chumming the PBMs would be a good start.

~~~
s73v3r_
I think the actual correct answer is to legally ban services like 23andMe, or
anything like them, from talking to insurance companies. Finding a service
that actually respects you is exponentially more difficult than it sounds, as
that relies on all the incidents already having been found out. Before this
news, most people had no idea that this was happening.

------
rrherr
From _The End of Asymmetric Information_ by Alex Tabarrok & Tyler Cowen:

The actual problems with health insurance markets have less to do with
information asymmetry and adverse selection than with _too much information.
That can make some people’s insurance very expensive at actuarially sound
rates._ For instance if you have a cancer of a given kind, this is verifiable
to the outside world, and if the treatment costs are $200,000, the cost of an
insurance policy will in turn be about $200,000. Buying the policy won’t be
cheaper than buying the treatments, and in that sense the market for insurance
is not always present. That is a very real public policy problem … The cheap
sequencing of the genome may accelerate and intensify these issues. …

[https://www.cato-unbound.org/2015/04/06/alex-tabarrok-
tyler-...](https://www.cato-unbound.org/2015/04/06/alex-tabarrok-tyler-
cowen/end-asymmetric-information)

------
chabsf
The whole point of insurance is to distribute risk. At some point, if coverage
granularity becomes too high, insurance will just become pointless, right?

~~~
ajmurmann
I think it's more subtle than that. It's also about symmetry of information.
If you for example do 23&me you might find it that you have a much increased
likelihood of getting a fatal disease soon. Thinking about your family's
financial future you might decide to get life insurance because of this new
information. Your individual risk in this case is very different from the
average, you know this and that's why you are getting the insurance. This
scenario if it became common also would break the insurance model because the
insured pool suddenly wouldn't include people with average risk but tend
towards higher risk. This would lead to higher cost for everyone who is
insured. In an extreme scenario the cost might get so high that it only makes
sense to get life insurance for people who know they are likely to die soon.
Of course the likely scenario is less extreme, but this shows the principle
nicely.

~~~
emiliobumachar
Very well put. Systematizing the algorithm, we have:

1) Get tested

2) Use the test results to determine the actuarial value of your hypothetical
life insurance

3) If the price is less than the value, buy the insurance. If not, don't buy.

~~~
solotronics
you could actually turn this into a business model

------
neverminder
There's a simple anonymity hack, unless of course your relatives "out" you. I
bought my 23andme kit from Amazon, then registered on 23andme website with a
fake name. I have my results, but as far as 23andme are concerned I'm John
Smith.

~~~
phyzome
I was going to do this, but someone said that 23andme also takes a survey of
family history, health, and demographic information—which is then used for
actual research. I don't want to pollute data used for scientific research!

How recently did you do this, and was there any information collection like
that?

~~~
neverminder
I did this a few months ago, but I'm pretty sure the survey you mentioned is
optional, at least I don't remember doing it, so you don't necessarily have to
"pollute data".

~~~
phyzome
Sweet!

And does the kit have any sort of identifier with it? If so, I was considering
some sort of 23andme kit remixing service, where people pool funds to buy a
bunch of kits, and then randomly select a kit from the shipment. :-)

~~~
neverminder
Just get it from Amazon, the packaging doesn't have any unique identifiers
like serial number, so if you register with fake name/email on 23andme -
you're totally anonymous.

------
teeray
> “If you apply for life insurance they do have a right to get all your
> medical records. And if you’ve had a genetic test taken, they do have a
> right to request it”

This data isn't something an individual has full control over. What if one of
your relatives took a genetic test? If that relative was denied for a policy
on genetic test grounds, can you be denied for the same reasons?

~~~
bilbo0s
Probably, but why would _anyone_ in your family be disclosing their genetic
profile when your family knows it has these sorts of things sitting in their
DNA? I mean, if you're in a family where a lot of people get certain cancers,
or congenital heart defects are common - well - exercise a little common sense
and forego any DNA testing that Ancestry.com offers you.

~~~
throwawaymath
Doesn't it seem unrealistic to you to rely on your extended family members not
to disclose that information? Whatever you personally believe is "common
sense", your family might not have it - or they might simply disagree with
you.

------
eli
I think the underlying issue is real, but the headline seems inflated. Has
this ever actually happened to anyone?

I recently bought life insurance and I'm pretty sure they didn't even bother
to ask my primary care doctor for her records (though they had the right to),
and they certainly didn't ask me about any tests I may have done on my own. (I
think they did obtain at least some of my Rx history though. I assume from CVS
Caremark.)

Right now I think there's kinda the opposite problem with Long Term Care
insurance where people who take a genetic test that shows high risk for e.g.
Alzheimer's run out and buy LTC insurance which messes up the risk pool.

~~~
maxxxxx
They may nail you later because you didn't disclose something. I know people
who have been dropped from their health insurance after years of paying
because they forgot to disclose a previous injury. I should add they got
dropped when they had a claim. That means the insurance happily took their
money until it was time to pay up.

~~~
eli
I'm pretty confident that I answered every question accurately and that no
answers would have changed based on anything I could have learned from a
genetic test.

Health insurers were really bad about "prior conditions" before Obamacare. I
think life insurance has always been more tightly regulated.

FWIW, my policy says the insurer can only challenge the application within the
first two years.

~~~
maxxxxx
"Health insurers were really bad about "prior conditions" before Obamacare"

It's good to know that the current administration is determined to take us
back to those glory days :)

------
Real_S
Also, before you send your DNA off... Keep in mind that these companies are
not legally allowed to delete your data.

[https://www.bloomberg.com/news/articles/2018-06-15/deleting-...](https://www.bloomberg.com/news/articles/2018-06-15/deleting-
your-online-dna-data-is-brutally-difficult)

~~~
howard941
FTA: "It’s a lesson we’re destined to keep learning: Once you share something
online, you can’t really ever unshare it."

Your genetic info is sort of like a trade secret in the USA, but without
criminal sanctions when it's wrongfully appropriated.

------
aiCeivi9
Wasn't there a novel, like 20 years ago, about insurance company having to
hide massive profits from using DNA profiling? Does anybody remember its
title? It looks like real life has catched up with fiction.

------
jobigoud
Could one poison the records by sending multiple samples of different blood
sources attached to the same name? So the database query would'nt be
conclusive, but _you_ would know which test is legit.

How would the ancestry testers react if I sent several samples in my name?

Will there be a market for clean blood that you can use to confuse the records
and get a sort of plausible deniability of identity?

------
rflrob
The article does obliquely reference the Genetic Information Nondiscrimination
Act (GINA), but then says it can be changed. This law was passed in 2008, for
the most part before the rise of consumer ancestry tests. It seems unlikely to
me that a major rollback of protections on these data is going to be easy to
pass.

~~~
_rpd
[https://en.wikipedia.org/wiki/Genetic_Information_Nondiscrim...](https://en.wikipedia.org/wiki/Genetic_Information_Nondiscrimination_Act)

Interesting, I'd like to read more commentary on this act. Anyone?

------
magduf
As a person who isn't old, lives below his means, and doesn't have children, I
don't see the problem here. From my perspective, life insurance is nothing but
a big scam. I don't anticipate dying any time soon, and if I do, I don't have
any younger heirs. If I want to build wealth, I can do a lot better with index
funds and mutual funds.

Honestly, I just don't see the point of life insurance at all, unless someone
has a family with children and doesn't have any significant wealth
accumulated.

~~~
solotronics
I think most people have a very minimal amount of capital accumulated. Life
insurance exists to help their family not starve if they unexpectedly die. Its
opt in which totally makes sense to me. I pay for it because it costs
basically nothing for me as a healthy young person and it would provide a nice
windfall for my girlfriend if for example my plane fell out of the sky.

~~~
perl4ever
We have survivors' benefits from Social Security in the US. The logical thing
to do, from my perspective, would be to make the existing government program
designed to insure everyone cover people sufficiently. Given that baseline,
the market for life insurance doesn't matter so much.

------
laken
The upsetting thing with this whole "paying for the privilege of giving
someone else your DNA" trend, is that even if you are opposed to it, relatives
of yours essentially give your data too. For example, apparently, both my
mother and father have already sent off their DNA to these various ancestry
companies, which by extension means that I'm also in there, albeit slightly
detached.

~~~
bumholio
Sharing genes with other people has indeed been a source of headaches since
the beginning of time (take, for example, the whole Garden of Eden fiasco).
Luckily, the advantages of being inside the genetic group, like say
inheritance, usually outweigh the nuisance.

------
otakucode
I literally got my DNA run now because I have real concern that in the future
if you ever get it sequenced you will be legally required to share it with
insurance companies, law enforcement, and many others. I'm hoping that I'll be
able to get grandfathered in and not share mine.

------
djrogers
Important point from teh article that about half of the posts here seem to
have missed - this is _not_ about health insurance, but life insurance.

"while health insurers may not use or consider genetic test results when
selling a policy, companies that sell life insurance, can."

------
swebs
Out of curiosity, how hard would it be to make an open-source, home ancestry
test? Assuming that all the necessary data is there, which equipment would you
need to sequence your DNA?

~~~
namibj
Start in the high 4 digits. If you're lucky.

------
safgasCVS
This just makes me want to watch Gattaca again

