On the Third Hand: Kidneys

Kidney transplant specialists have complained in the American Journal of Transplantation that people who donate kidneys to others end up facing trouble getting life insurance and often pay higher rates for life coverage.

The authors of the article contend that kidney donors — who go on living with one kidney — tend to be healthier than other people and go on to live about as long as members of the general public. They argue that life insurers could take away a concern that discourages some people from donating kidneys by charging kidney donors the same premiums as non-donors.

On the one hand: If live kidney donors really have a longer life expectancy than members of the general public, that seems to be in interesting bit of data.

If researchers can show that U.S. live kidney donors have a life expectancy similar to that of otherwise comparable members of the general public, or similar to that of some other relevant group of people, then life insurers should certainly offer live kidney donors coverage priced in accord with their actual level of risk.

On the other hand: I think the transplant community ought to work with actuaries to come up with the information that insurers and their actuaries need to justify lower rates — if the numbers justify lower rates.

If a careful look at the numbers shows that live donors actually have a lower life expectancy than members of the general public and are fairly risky, I think life insurers should use that as a chance to talk to people about the idea of writing life insurance that reflects the reality of how the world is, rather than fantasies about how we want it to be.

See also: On the Third Hand: Venezuela

In the health insurance market, we as a nation have decided to try to ignore the issue of health status when writing major medical insurance — in part because, in the real world, moral and ethical concerns make letting market forces work freely is difficult.

Whatever the virtues of ignoring morbidity reality in the health insurance market might be, the disadvantages are that we end up making health care finance more complicated and, especially for the young and the healthy, more expensive.