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After GINA, Where Do Life Insurance Firms Stand on Using Genomic Information for Coverage Decisions?

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Originally published March 2.

By Turna Ray

Life insurance providers in the US may not be using genetic information to make underwriting decisions right now, but the lobbying efforts of a Maryland-based interest group to limit legal restrictions in this area suggest that the industry's unofficial moratorium on the use of genetic information may eventually come to an end.

The passage of the Genetics Information Non-discrimination Act in 2008 appeared to have quelled fears of genetic discrimination in the US — at least regarding health insurance and the workplace. However, life insurance companies are exempt from GINA and most states do not restrict the use of genetic information in life insurance underwriting.

A Maryland-based interest group for life insurers is lobbying the state legislature not to pass laws restricting the use of genetic information — an effort that underscores the prevailing view of payors that genetic data is no different than other clinical factors in making underwriting decisions.

"We use these genetic test results in underwriting exactly as we use all medical information: with care and based on sound scientific basis or clinical or actuarial relevance," the League of Life and Health Insurers of Maryland said in a statement to the Maryland Insurance Administration's Genetic Testing Workgroup last September. "We know of no problem of misuse of genetic information or tests in the underwriting of life, disability income, or longterm-care insurance."

Furthermore, a new partnership between US consumer genomics firm Navigenics and Australian health insurance provider Nib to provide Nib's customers with discounted genetic testing services has brought to the foreground the possibility of a loophole in GINA that would allow life insurers to piggyback on partnerships between DTC genomics firms and health insurers.

Similar to the US, Australian law protects genetic information from being used to charge higher premiums for health insurance, but that legal protection does not extend to life insurance firms.

Following its partnership with Navigenics, Nib's website informed customers that although participation in genetic testing through Navigenics' service is voluntary and the results will not be reported to Nib, customers "may be required to disclose genetic test results, including underlying health risks and conditions, which the tests reveal, to life insurance or superannuation providers."

For the burgeoning consumer genomics industry, which is already fielding criticism from regulatory authorities and academic researchers for the questionable clinical value of gene scans, the topic of partnering with health and life insurance companies is a volatile one. The perception that participation in these testing services could impact insurance coverage would hurt consumer genomics firms' customer retention efforts in an already difficult economic environment.

"Given our commitment to privacy and data protection, Navigenics currently has no plans to partner with life insurance companies in the US," a spokesperson for Navigenics told Pharmacogenomics Reporter.

23andMe declined to be interviewed for this story.

The Coriell Personalized Medicine Collaborative, a non-profit research entity that provides genetic risk scans for free to participants of studies it is conducting, was more forthcoming about its discussions with payors. According to Courtney Sill, communications director for CPMC, the organization has had discussions with insurers about best practices to communicate disease risk to individuals and the potential for employer wellness programs to promote personalized medicine in their efforts to encourage healthy lifestyles.

"Their goal is not to save money by discriminating using genetic information but to ultimately decrease healthcare costs by reducing adverse drug reactions using more tailored medical care and also by promoting healthy living," Sill said.

Although Coriell participants can choose to share deidentified data with non-profit and for-profit groups, Sill said that CPMC currently does not have any data-sharing partnerships with private payors, including life insurance firms.

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While most of Coriell's discussions so far have been with health insurers, life insurance companies commonly partner with healthcare payors to provide their customers comprehensive services. For instance, New York Life provides its customers the option of signing up for individual and group healthcare insurance through its partners, Humana, John Alden, Golden Rule, Cigna, and others. So, it wouldn't be too far of a leap for a life insurance provider to connect the dots if a health insurance partner began offering voluntary consumer genomics testing to its customers.

Meanwhile, out of three major life insurers in the US contacted for this story, New York Life said that it is not using genetic information in its coverage determinations. ING did not respond to interview requests. Met Life refused to discuss its genetic testing policy with Pharmacogenomics Reporter, saying it was an "industry-wide issue."

According to Whit Cornman of the American Council of Life Insurers, a trade association that represents life insurance companies on state and federal legislative and regulatory matters, the industry is not currently using genetic information for underwriting purposes.

"In general, insurers are not quick to embrace new technologies such as genetic testing," Cornman told Pharmacogenomics Reporter. "Instead they tend to look at things that have a long track record. Weight, family medical history, cholesterol, blood pressure, and whether someone is a smoker are some examples of what an insurer may look at when considering an application."

Although DTC genomics companies and life insurers may be proceeding cautiously when it comes to partnerships in the US, that doesn't mean that such alliances won't be inked in the near future. Not only are life insurance companies exempt from GINA, but most states do not restrict the use of genetic information in life insurance underwriting.

Sharon Terry, president of Genetic Alliance, a non-profit group that led the battle on Capitol Hill to garner federal protections for genetic information in health insurance and employment, believes that GINA would have had "no chance" of passing if life insurers were included in the bill.

One reason for this may be the prevailing view among payors that health insurance is different in scope and societal function from life insurance, since the former grants individual access to health services by reimbursing doctors, hospitals, and pharmacies, and the latter provides financial protection to individuals and their families.

Furthermore, most payors believe that using validated gene alterations associated with disease risk are no different than using other clinical factors — such as age, sex, smoking, and family history — to make underwriting decisions. Representing these views, the League of Life and Health Insurers of Maryland has been lobbying the state legislature not to pass laws restricting the use of genetic information by the industry.

"We follow the development and clinical adoption of genetic tests because we often receive genetic test results as part of routine medical records," LLHIM said in a statement to the Maryland Insurance Administration's Genetic Testing Workgroup last September.

According to LLHIM, its "underwriters are following the developments in genetic testing just as scientists, regulators, and legislators are." The group, representing the interests of life insurance providers operating in Maryland further noted that "our customers … expect us to use the information necessary to make an accurate risk assessment."

When legislation to restrict life insurers from using genetic information to make coverage determinations did not pass in Maryland last year, the state's General Assembly instructed MIA to form the Genetic Testing Workgroup to research the issue and recommend policy options. During the group's research period, the LLHIM issued a statement urging the state legislature to keep the laws flexible and open with regard to the extent life insurers can use of genetic information.

According to LLHIM, payors are "very concerned" about legal restrictions on their ability to underwrite based on traditional medical information and results from genetic and non-genetic tests. "Insurers are concerned that the underwriting limitations [are] likely to jeopardize their ability to use the most reliable and efficient tests in the future — when DNA or RNA-based tests (i.e. narrowly defined genetic tests) may become as common as cholesterol screening is today," the LLHIM said in its presentation.

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Of particular concern to the group is the growing prevalence of DTC genomics firms, which are amassing genetic risk information on their customers but do not have to share this information with payors. As a result, life insurance firms have no way of confirming whether an insurance applicant has taken a gene risk scan and potentially has information that could influence premiums.

This concern may be the key reason the lobby wishes to keep anti-genetic discrimination regulations broad: it leaves open the possibility for insurers to ink partnerships with consumer genomics firms in the future and use genomic data for underwriting.

"Currently, medical underwriting for disability, long-term care, and life insurance relies on certain genetic information and family history," the Maryland Genetic Testing Workgroup noted in a report last year advising the state assembly on potential policy options regulating life insurers' use of genetic data. "Although DNA-based genetic tests are not used in medical underwriting, insurers want to maintain the ability to use them in the future."

Pooling Our Risk

"Adverse selection in this area is likely to become a particularly significant issue as home kits or direct-to-consumer genetic tests become more available and less expensive over time," LLHIM said in its statement.

"Direct-to-consumer tests may preclude an insurer from obtaining information critical to underwriting because the nature of the tests and how they are often ordered and delivered may prevent the insurer from being informed of the results or even knowing a genetic test was sought by a potential insured," the group added. "DTC genetic test results also may not become part of an individual’s medical record and thus may not be reported to the insurer."

LLHIM acknowledged that the public feels that genetic risk data is different from clinical information readily used in underwriting, but suggested that perception will disappear as the science advances and people become more comfortable incorporating genetic data into their medical care.

Currently, the terms of service of most DTC genomics firms warn that the information gleaned from gene scans is not to be used for medical decision-making without the advice of a doctor. That said, as the price of genetic testing drops and the utility of gene alterations to predict disease risk and drug response improves, the end goal for DTC genomics firms will be to integrate genetic information into consumers' medical care.

To some extent, this is already happening. Navigenics last year launched an online portal that allows doctors to access their patients' genetic data and introduced a lower-priced, pared-down version of its genetic testing service for gauging peoples' genetic predisposition for 10 common conditions [see PGx Reporter 02-04-2009].

Simultaneously, Navigenics partnered with MDVIP, a collective of physicians spread across 25 states and Washington, DC, who practice preventative and personalized healthcare. Under the collaboration, MDVIP doctors will use the Navigenics testing service to identify an individual’s risk for developing conditions such as type 2 diabetes, cancer, heart attack, and celiac disease [see PGx Reporter 12-10-2008].

Industry observers point out, however, that life insurers would factor genomic information into mortality calculations no differently than they currently use medical information in underwriting.

"The medical underwriting of life insurance involves an analysis of an individual applicant’s mortality risk," LLHIM explained in its statement. As such, "by knowing the prevalence of a disease, the post-test probability of having the disease can be calculated for either a positive or negative result. By combining the post-test probability with the mortality ratio for that disease, an adjustment to the standard premium can be made for the result of the test."

Other organizations that support the use of genetic information by insurers have suggested that genetic predisposition data would minimally impact premium rates since the clinical utility of such information is limited.

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"In the context of risk-based insurance systems, where premiums depend upon estimating an individual’s risk of disease based on numerous different factors (age, sex, smoking, family history, etc.), it is unclear why 'genetic' information should be singled out and treated any differently from any other information that might be relevant," argued the Foundation for Genomics and Population Health, a non-profit organization in the UK.

"This is particularly pertinent for multifactorial diseases, where the contribution of common genetic variants is normally substantially outweighed by other environmental or behavioral risk factors," the foundation said on its website in light of the discrimination concerns about Nib and Navigenics' partnership. "Thus, information provided by whole-genome SNP profiling is unlikely to have much effect on insurance premiums."

To those who argue that genetic-risk information differs from traditional medical information because a heightened genetic risk for a disease doesn't necessarily mean the disease is certain to manifest, the LLHIM points out that there is similar uncertainty when making mortality assessments using non-genetic data.

"Some people feel there is a fairness issue in charging a higher premium to people with abnormal genetic test results since they may never develop the disease and, even if they do develop the disease, it may be mild enough to not be clinically significant. However, this same issue applies to many different risk factors for different diseases," LLHIM states. "For example, not every person with hypertension or elevated cholesterol will have a heart attack or stroke, or, if they do have a heart attack or stroke, [there is no certainty] that it would be severe enough to cause death, loss of work capacity or loss of [activities of daily living]."

LLHIM stressed that "medical underwriting is a risk assessment process based on the projected performance of a group of insureds with a specific impairment and not that of a specific individual."

Legal Reach

Currently, there is a patchwork of state laws and no federal limits on how life insurance firms can use genetic information in their coverage decisions.

Among the states, Vermont and Massachusetts have restricted the use of genetic information by life insurance policies. Seven states require actuarial justification to use genetic information in life insurance underwriting.

In Maryland, attempts to enact laws restricting life insurance providers' use of genetic information have been met with resistance from the industry. Currently, life insurers in the state cannot, without actuarial justification, give a differential rating to an applicant based on a genetic trait "harmless in itself."

Last year, Maryland's General Assembly considered five bills pertaining to the use of genetic information by payors, including one bill titled "Life insurance and annuities — Genetic tests information and services — Prohibited." That bill would have expanded current legal restrictions on life insurance providers, barring them from requiring genetic testing or using genetic information to deny or limit life insurance coverage, or to charge a different rate under an annuity contract. However, the bill would still allow the use of genetic information for underwriting, as long as the determination was based on "sound actuarial principles," such as using genetic information for a manifested disease.

However, when this and four other related bills did not pass, the assembly convened the Workgroup on Genetic Testing to research the field and issue recommendations as to how state-based payors should handle genetic information.

The workgroup did not reach a consensus on the matter, but recommended that the General Assembly amend the state statute to permit payors to use genetic information when underwriting disability and life insurance but prohibit insurers from requiring an applicant to undergo a genetic test. The workgroup felt that life insurance was more discretionary than health insurance, which Americans have come to expect from their employers.

In some states, insurers who wish to use genetic testing in underwriting are required to pay for the test, notify the applicant of testing, and obtain informed consent before proceeding with testing. Two states, Alaska and Florida, have statutes making a person's genetic information his or her property. However, the Maryland workgroup determined that it was beyond its charge to determine the impact on research, labs, and clinicians of defining genetic information as personal property.

The possibility of federal laws in this regard is currently on hold.

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According to Genetic Alliance's Terry, although there is interest on Capitol Hill to craft legislation that would close the life insurance exclusion in GINA, the protracted healthcare reform debate has pushed the issue to the backburner for the time being.

"We had hoped to see healthcare reform pass much more quickly," said Terry, adding that around GINA's passage in 2008, Representative Anna Eshoo (D-Ca.) had said she might sponsor a bill restricting genetic discrimination in life and long-term care insurance.

"We just have not had the bandwidth to do that," Terry said. "Because of all the other issues around healthcare reform, there is no way anyone would pay attention to this now."

Outside the US, the use of genetic information in life insurance coverage differs from country to country.

For instance, in the UK, which provides government-sponsored healthcare, the Association of British Insurers has imposed a moratorium on the industry's use of genetic test results to make coverage determinations on life and long-term care insurance. The moratorium, which holds until 2014, applies to life insurance policies valued up to £500,000 ($746,307), critical illness coverage up to £300,000 ($447,388) and income protection of up to £30,000 ($44,747), which accounts for 97 percent of insurance policies sold. Insurers are not allowed to ask for the results of genetic tests, unless they are tests approved by the government's Genetics and Insurance Committee. The only GAIC-approved test is for Huntington's disease.

In contrast, while Canadians also have universal healthcare, there is no restriction in Canada against using genetic information to deny coverage of life insurance or make decisions about employment.

According to Navigenics, its collaboration with Nib is the only one with an insurance provider in a foreign country. The company maintains that since launching the partnership, its interactions with Nib's customers have been positive, despite genetic discrimination concerns.