Filed Under:Health Insurance, Ltci

HHS, genetic information and LTCI


Claude Thau
Claude Thau recently ran an article about new U.S. Department of Health and Human Services (HHS) final regulations that will let insurers continue to use genetic information in underwriting long-term care insurance (LTCI), for now.

But officials suggested that HHS will study the topic further and could eventually prohibit use of genetic information in LTCI underwriting.

If consumers know that they have an unusual risk that can be insured, and the insurance company is precluded from getting such information, the consumers will be insured at a price that does not reflect their risk.  The result will generally be:

  • In the short run, the insurer will lose profit.
  • In the longer term, the insurer will raise prices for everyone, resulting in insurance buyers who don't have such risk exposure subsidizing those who do.
  • Eventually, the risk imbalance could drive prices for that insurance product too high for the market to bear, thereby eliminating the supply of that product.

The severity of the situation depends on factors such as:

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