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Self-Insurance With Genetic Testing Tools

Author

Listed:
  • David Crainich

    (LEM - Lille économie management - UMR 9221 - UA - Université d'Artois - UCL - Université catholique de Lille - Université de Lille - CNRS - Centre National de la Recherche Scientifique)

Abstract
The development of genetic testing creates opportunities to better target disease prevention actions. In this article, we determine how the genetic information modifies self-insurance efforts in different health insurance market equilibria with adverse selection. We show that a regulation prohibiting insurers from using genetic information for rate-making purposes: (1) cancels the benefits of genetic testing when pooling equilibria occur and (2) does not prevent the exploitation of the benefits derived from genetic testing when separating equilibria (both of the Rothschild-Stiglitz or of the Miyazaki-Spence type) prevail in insurance markets.

Suggested Citation

  • David Crainich, 2015. "Self-Insurance With Genetic Testing Tools," Post-Print hal-01533549, HAL.
    • Handle: RePEc:hal:journl:hal-01533549
    DOI: 10.1111/jori.12085
    as

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    References listed on IDEAS

    as
    1. Bardey, David & De Donder, Philippe, 2013. "Genetic testing with primary prevention and moral hazard," Journal of Health Economics, Elsevier, vol. 32(5), pages 768-779.
    2. Francesca Barigozzi & Dominique Henriet, 2011. "Genetic Information: Comparing Alternative Regulatory Approaches When Prevention Matters," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 13(1), pages 23-46, February.
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    5. Michael Hoy & Michael Ruse, 2005. "Regulating Genetic Information in Insurance Markets," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 8(2), pages 211-237, September.
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    7. Strohmenger, R. & Wambach, A., 2000. "Adverse selection and categorical discrimination in the health insurance markets: the effects of genetic tests," Journal of Health Economics, Elsevier, vol. 19(2), pages 197-218, March.
    8. Michael Rothschild & Joseph Stiglitz, 1976. "Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 90(4), pages 629-649.
    9. Hoel, Michael & Iversen, Tor, 2002. "Genetic testing when there is a mix of compulsory and voluntary health insurance," Journal of Health Economics, Elsevier, vol. 21(2), pages 253-270, March.
    10. Doherty, Neil A. & Thistle, Paul D., 1996. "Adverse selection with endogenous information in insurance markets," Journal of Public Economics, Elsevier, vol. 63(1), pages 83-102, December.
    11. Wilson, Charles, 1977. "A model of insurance markets with incomplete information," Journal of Economic Theory, Elsevier, vol. 16(2), pages 167-207, December.
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    13. Michael Hoy & Fabienne Orsi & François Eisinger & Jean Paul Moatti, 2003. "The Impact of Genetic Testing on Healthcare Insurance," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 28(2), pages 203-221, April.
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    Cited by:

    1. Bardey, David & De Donder, Philippe, 2019. "A Welfare Analysis of Genetic Testing in Health Insurance Markets with Adverse Selection and Prevention," TSE Working Papers 19-1035, Toulouse School of Economics (TSE), revised 22 Jan 2024.
    2. Posey, Lisa L. & Thistle, Paul D., 2021. "Genetic testing and genetic discrimination: Public policy when insurance becomes “too expensive”," Journal of Health Economics, Elsevier, vol. 77(C).
    3. Bardey, David & De Donder, Philippe & Mantilla, César, 2019. "How is the trade-off between adverse selection and discrimination risk affected by genetic testing? Theory and experiment," Journal of Health Economics, Elsevier, vol. 68(C).
    4. Bardey, David & De Donder, Philippe, 2013. "Genetic testing with primary prevention and moral hazard," Journal of Health Economics, Elsevier, vol. 32(5), pages 768-779.
    5. Christine Arentz, 2012. "Auswirkungen von Gentests in der Krankenversicherung," Otto-Wolff-Institut Discussion Paper Series 04/2012, Otto-Wolff-Institut für Wirtschaftsordnung, Köln, Deutschland.
    6. David Bardey & Philippe De Donder & César Mantilla, 2014. "Adverse Selection vs Discrimination Risk with Genetic Testing. An Experimental Approach," Documentos CEDE 12341, Universidad de los Andes, Facultad de Economía, CEDE.
    7. Martin Eling & Irina Gemmo & Danjela Guxha & Hato Schmeiser, 2024. "Big data, risk classification, and privacy in insurance markets," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 49(1), pages 75-126, March.
    8. Maik Dehnert, 2020. "Sustaining the current or pursuing the new: incumbent digital transformation strategies in the financial service industry," Business Research, Springer;German Academic Association for Business Research, vol. 13(3), pages 1071-1113, November.
    9. François Pannequin & Anne Corcos, 2023. "Risk Management and Public Policies: How prevention challenges monopolistic insurance markets," Documents de recherche 23-02, Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne.
    10. David Bardey & Philippe De Donder, 2015. "Welfare Impacts of Genetic Testing in Health Insurance Markets: Will Cross-Subsidies Survive?," Documentos CEDE 17220, Universidad de los Andes, Facultad de Economía, CEDE.
    11. Peter, Richard & Richter, Andreas & Thistle, Paul, 2017. "Endogenous information, adverse selection, and prevention: Implications for genetic testing policy," Journal of Health Economics, Elsevier, vol. 55(C), pages 95-107.
    12. Stefan Felder, 2022. "Decision thresholds with genetic testing," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 23(6), pages 1071-1078, August.

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