While the House of Representatives is set to take up the controversial issue of a patients’ bill of rights this week, a House panel began hearings last week on a health issue that could prove to be just as troubling and emotional: genetic testing.
The subject of the hearing was legislation, H.R. 602, introduced by Reps. Louise Slaughter, D-N.Y., and Constance Morella, R-Md., that would bar health insurers from discrimination based on genetic information.
“By banning genetic discrimination, we are simply asking insurers to continue covering the exact same people, under the exact same conditions, they are covering today,” says Slaughter.
She says that genetic discrimination is not just a “potential,” but is actually happening today.
Slaughter cites a 1997 article appearing in The New York Times claiming that an unnamed health insurer not only refused to pay for a prophylactic double mastectomy, but also canceled the policy of the patient when she presented the company with genetic information that she faced a dramatically increased risk of cancer.
“This story encapsulates Americans worst fears about the potential abuse of genetic information,” Slaughter says.
But Donald A. Young, interim president of the Health Insurance Association of America, Washington, says that while legislation such as H.R. 602 is well intended, it is unnecessary and would end up harming consumers.
Currently, he says, insurance companies are barred by federal law (the Health Insurance Portability and Accountability Act of 1996) from discriminating against those with group health coverage based on genetic information.
Moreover, Young notes, HIPAA also protects individuals who were previously covered in the group market.
But in detailed testimony, Young notes that for insurance products not covered by HIPAAsuch as disability and long-term careconcerns about the use of genetic information run in both directions.
“While there appears to be considerable concern about the potential for insurers to discriminate against consumers based on genetic information, there appears to be a conspiracy of silence regarding the potential for individual consumers to use genetic information in a way that disadvantages insurers and their other policyholders,” Young says.
The potential for adverse selection, he says, is especially a risk for products that are voluntarily purchased by individuals who can choose the timing of their purchase, as well as the extent and duration of coverage.
“In these cases, individual applicants have the opportunity to make decisions based on risk characteristics that are known or suspected by them but unknown to the insurer,” Young says.
High-cost individuals would purchase insurance at average premium levels, he says, forcing premiums for all policyholders to rise.
Some of these policyholders, Young says, might determine that the value received for their premiums no longer justifies continued coverage.
The public sensitivity of the use of genetic information is understandable, Young says. However, he adds, Congress should avoid premature action that could undermine access to affordable health care coverage in the future.
In other news, the Department of Health and Human Services has issued its first formal guidelines for complying with the controversial privacy rule it recently promulgated.
The guidelines contain certain changes that are supported by insurance companies.
In general, the privacy rulewhich was mandated by HIPAAcreates national standards to protect individual medical records and other personal health information.
Although the rule took effect on April 14, 2001, the guidelines postpone its application to group health plans until July 1, 2002, a change that was supported by HIAA.
HIAA notes that Congress is currently considering patient protection legislation that could change the rules regarding health insurance claims.
Changing the application date “enables group health plans to avoid the confusion and duplicative expenses of compliance that would ensue should legislation be adopted that alters the underlying statute,” HIAAs Young says.
In addition, the guidelines clarify when personal information held by health providers and health plans can be disclosed to life insurance companies.
The specific concern is the “minimum necessary” standard. Under this standard, providers and health plans must take reasonable steps to limit the disclosure of protected information for certain legitimate purposes to the “minimum necessary” to accomplish the purpose.
Life insurers were concerned about how this language would affect disclosure of information for underwriting purposes.
However, the guidelines state that the minimum necessary standard will not apply to most disclosures that are authorized by an individual.
This includes authorizations received from third parties, such as life insurers, pursuant to an individuals application for a policy.
“For example, if a covered health care provider receives an individuals authorization to disclose medical information to a life insurer for underwriting purposes, the provider is permitted to disclose the information requested on the authorization without making any minimum necessary determination,” the guidelines say.
The American Council of Life Insurers, Washington, praised HHS for making that clarification.
Reproduced from National Underwriter Life & Health/Financial Services Edition, July 20, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.