Genetic testing and the insurance industry in Canada

The American Medical Association notes that there are over 48 000 genetic tests currently available for health risk screening or diagnostic purposes, and the number is rising. Genetic tests can reveal predisposition to certain cancers, degenerative diseases such as Huntington disease, metabolic disorders, and a growing number of other conditions. Genetic testing is also becoming more affordable. In 2015 a US company announced it could provide full genome sequencing at a price of $999. Other companies are competing to lower that price.

This expanding consumer market is provoking strong debate about the implications of genetic testing for individuals seeking life and health insurance. The Canadian Coalition for Genetic Fairness (CCGF), a group advocating for protections against genetic discrimination, asserts that insurance companies should not be able to ask applicants for genetic test results. The Canadian Life and Health Insurance Association (CLHIA) responds that genetic test results should be accessible to insurers so they can accurately assess risk. The debate has hinged on social, industry, and privacy concerns, and has led the Government of Canada to propose a law against genetic discrimination.

Consumer protection groups argue that disclosure of genetic test results allows for discrimination by insurance companies, which can deny coverage to individuals based on factors that may have an uncertain relationship to disease. They predict a chilling effect: if people suspect they will be denied insurance, they may avoid genetic testing that could provide valuable information. The CCGF says this is already happening, at a cost both to individual knowledge and to research that depends on genetic testing. If people do undergo testing that reveals risk factors, they may then refuse to purchase more costly insurance, leaving themselves uninsured.

Apart from concerns around discrimination, privacy advocates worry about potential mishandling of people’s most sensitive medical information. As science sheds light into an increasing number of health issues, questions arise about how that information will be handled by insurers, health professionals, and private companies that offer genetic testing. Privacy groups reason that genetic information must be given robust protection as its scope and availability evolve.

The CLHIA argues, however, that insurance is a good-faith agreement predicated on symmetry of information between insurer and insured: to accurately assess risk and price its products, an insurance company must have access to all material information about an applicant’s health. Even if genetic testing cannot predict health issues with certainty, it does provide information on risk and should be treated the same way as information such as family history. If insurance companies are barred from genetic test results, the CLHIA asserts, applicants who know they have risk factors can purchase large insurance policies at the same cost as applicants with no known risk factors, jeopardizing the viability of insurance products. This phenomenon, known as regulatory adverse selection, would potentially increase claims and lead to higher insurance costs.

In April 2016 the Canadian Senate passed Bill S-201, An Act to Prohibit and Prevent Genetic Discrimination. This legislation would amend the Canadian Labour Code and the Canadian Human Rights Act to criminalize discrimination against an individual based on genetic characteristics. Proponents of the bill argue that Canada lags behind other G7 countries with laws against genetic discrimination, while opponents argue that those laws, such as the US Genetic Information Nondiscrimination Act, only apply to employment and essential health insurance. Supplementary life and health insurance providers are allowed to discriminate based on factors such as age, sex, weight, and genetic characteristics.

While Canada’s genetic nondiscrimination act moves through the approval process, patient advocates and the insurance industry continue to debate its implications. As medical science continues to unlock genetic mysteries and offer Canadians increasing access to their most personal information, however, the need for certainty around legal rights and privacy will continue to grow.
—Laura McLean
Client Services Administrator, Doctors of BC