Family members who learn of susceptibility are more likely to buy LTCI

By Allison Bell

Giving consumers access to the results of genetic tests for susceptibility to Alzheimers disease could have a noticeable effect on long term care insurance purchases and claims.

Researchers who studied the effects of testing information on 148 adult children of patients with Alzheimers found that the study participants who learned they were especially susceptible to Alzheimers were almost 6 times more likely to increase LTC insurance protection levels than the other participants were.

“If genetic testing for Alzheimers risk assessment becomes common, it could trigger adverse selection in long term care insurance,” Cathleen Zick, a professor at the University of Utah, and other colleagues on her team write in a study report published in the journal Health Affairs.

Zick and her colleagues suggest the study could drive insurers and policymakers to take another look at genetic test results that might influence the profitability of certain insurance products.

The test that Zicks team studied gives only limited information about individuals susceptibility to Alzheimers, but any major changes in Alzheimers testing and underwriting practices could lead to changes in the LTC insurance market.

Genworth Financial Inc., Richmond, Va., recently noted in an overview of the market that Alzheimers disease and other forms of dementia account for about 40% of LTC insurance claim costs.

Zicks team looked at children of people with Alzheimers who were tested for the presence of the e4 version of the “Apolipoprotein E” gene.

About 24.5% of Americans have inherited an APOE e4 gene from one parent, and about 1% have inherited copies of the APOE e4 gene from both parents, according to an article by Dr. Bradley Hyman of the Massachusetts General Hospital memory disorders unit.

Scientists discovered in the early 1990s that people who have the APOE e4 gene are more likely to develop Alzheimers.

An individual who has one copy of the gene is about 2 to 3 times more likely than the average person to develop Alzheimers, and an individual with 2 copies of the gene is about 15 times more likely to develop Alzheimers, according to Zicks team.

But scientists point out that only about half of the individuals with 2 APOE e4 genes will develop Alzheimers before age 80 and that many people with Alzheimers do not have any APOE e4 genes.

About 17% of the study participants who had at least one APOE e4 gene bought LTC insurance or increased their LTC coverage levels in the year after APOE disclosure, Zick and her colleagues write.

Zicks team found that study participants who learned they were “APOE e4 positive” were 5.76 times more likely than other participants to buy new LTC insurance policies, increase coverage limits on existing LTCI policies or make other changes in LTCI policies, even though all study participants knew they might be at risk for developing Alzheimers because at least one parent had suffered from the disease.

In contrast, the results of the APOE test had little noticeable effect on study participants purchases of life, disability or health insurance, the researchers write.

An earlier statistical analysis, published in 2001 by Angus Macdonald, a professor at Heriot-Watt University in Scotland, and Delme Pritchard, Heriot-Watt researcher, predicts that APOE testing will lead to significant effects in the LTC insurance market only if LTCI continues to have a low penetration rate, a high proportion of the population is tested for the APOE e4 gene, and individuals who test positive for the gene are at least 4 times more likely than other individuals to buy LTC insurance.

In the worst-case scenario, adverse selection could increase LTC insurers costs by about 23% for females at age 60 and about 16% for females at age 75, Macdonald and Pritchard estimate.

Those researchers say insurers could avoid antiselection by selling LTC insurance together with lifetime annuities or other products that appeal to consumers who expect to enjoy a long, healthy retirement.

Deborah Grant, a principal in the Chicago office of Milliman, emphasizes that genetic testing is not the only way to determine whether an individual is susceptible to Alzheimers.

The risk of antiselection involves family histories and patients awareness of early, hard-to-detect symptoms of Alzheimers as well as results of genetic tests, Grant says, but if patients get more access to Alzheimers genetic test results, “there is definitely a question of antiselection.”

Insurers need to balance the antiselection caused by the increased availability of genetic testing with their ability to come up with screening tools that detect signs of Alzheimers at earlier ages, Grant says.

Insurers also should support the effort to find ways to use improved treatments to cut the cost of Alzheimers-related claims, Grant says.


Reproduced from National Underwriter Edition, April 15, 2005. Copyright 2005 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.