Genetic testing poses fundamental questions for insurance. Testing can predict a low probability of future illness and disability, which can help promote the insurability of individuals with a family history of genetic risk, but it can also invite insurers to reject applicants, increase premiums, exclude people with certain illnesses and disabilities, and otherwise adjust the underwriting processes for individuals with certain genotypes. In the workplace, these issues may cause employers who offer or pay for insurance to alter their hiring behavior, either by selecting those with desirable genetic makeup or rejecting, dismissing, or reassigning those who carry an unwanted risk, ultimately threatening employability and the safety net that insurance is intended to provide.

The paper by Susan M. Wolf and Jeffrey P. Kahn published in this issue of the Journal of Law, Medicine & Ethics notes that we are members of the Working Group on Genetic Testing in Disability Insurance and that the members of the Working Group do not necessarily subscribe to its recommendations. Although we agree with some of Wolf and Kahn's recommendations, we do not agree with recommendations 1, 3, 4, and 5 for individual disability insurance and recommendations 1, 2, and 3 for group disability insurance. We use this paper to delineate our areas of disagreement, but we do not discuss areas such as employment law as they are not our areas of expertise.

First, understanding our roles on the Working Group is important. As members, we provided technical expertise on disability insurance. Our input to the Working Group represents our individual opinions.

Predictive medical information is used by underwriters to assess the future risk of a claim in medically based insurance products such as health, life, and disability insurance. Medical underwriting involves the science of evaluating medical information to determine the risk for groups of individuals with various medical conditions. In disability insurance, this involves an evaluation of medical information to predict the risk of becoming disabled.

Before discussing medical underwriting, an understanding of certain terms used by disability insurance companies and the products that are available is required. The first is the definition of disability. The Americans with Disabilities Act (ADA) defines disability as the following:

A physical or mental impairment that substantially limits one or more of the major life activities; or has a record of such an impairment; or is regarded as having such an impairment even when no impairment exists, no substantial limitation results from the impairment, or the impairment is only substantially limiting because of the attitudes of others.

This article discusses the disability insurance industry in order to provide context regarding the potential impact of genetic testing on disability insurance. It describes disability income insurance, exploring both the protection it offers and its main contract provisions. It goes on to describe the private insurance market and the differences between group and individual insurance, and concludes with implications of genetic testing with respect to the private disability insurance market. The individual disability income insurance market is theoretically of great interest as a matter of public policy since there is potential for unfair discrimination through genetic testing although this remains very unlikely as a matter of practice, however.

It is more likely that a person will become disabled than die before age 65. The loss of income during a disability can be quite devastating. In contrast to the high risk and high impact of disability are the realities of the disability market.

As we enter the new century, humanity wields increasing power to understand, alter, and control the world in which we live. The mysteries of our genetic code provide remarkable new insights into our unique human characteristics. Rapid developments in information technology provide instant access to limitless data. The information age has taken hold, and the genetic revolution is in full swing. With apologies to Aldous Huxley, we stand at the precipice of a brave new world.

It has been just 50 years since James Watson and Francis Crick's groundbreaking discovery of the double helix. Since then, profound developments in the science of genetics have been staggering. More staggering still are the potential benefits, the boundless horizons, the promised and unimagined applications of their work, and the work of the many scientists involved in the sequencing of the human genome. There can be no doubt that a firm and unwavering commitment to the betterment of humankind has fueled this tireless effort.

The idea that disability insurers would benefit if the use of predictive genetic testing expands may seem little short of obvious. If individuals with higher than species-typical genetic propensities for illness or disease are identified, and barred or discouraged from participating in disability insurance programs, is it not obvious that the amount that disability insurers pay out will decrease? Is there any reason to doubt that insurers thus would gain advantage by promoting genetic testing? Writers on this subject typically have taken on faith that advantage goes to whoever knows most about the genetic characteristics of the individual seeking insurance. They therefore have assumed, without proving, that insurers’ interests lie with proliferating genetic information about insurance seekers.

Consequently, from a perspective that gives priority to commercial interests, denying insurers the freedom to obtain genetic information about insurance seekers or holders appears obviously damaging and even unfair. On the other hand, from a perspective that gives priority to the interests of citizens who may use insurance, the greater use of and access to predictive genetic testing sets off ethical alarms.

One of the most important and contentious policy issues surrounding genetics is whether genetic information should be treated separately from other medical information. The view that genetics raises distinct issues is what Thomas Murray labeled “genetic exceptionalism,” borrowing from the earlier term “HIV exceptional-ism.” The issue of whether the use of genetic information should be addressed separately from other health information is not merely an academic concern, however. Since the Human Genome Project began in 1990, nearly every state has enacted legislation prohibiting genetic discrimination in health insurance; two-thirds of the states have enacted laws prohibiting genetic discrimination in employment, and other state laws have been enacted dealing with genetic discrimination in life insurance, genetic privacy, and genetic testing. Bills in Congress also would prohibit genetic discrimination in health insurance and employment.

The Human Genome Project has allowed researchers to gain new insights into the genetic causes of health and disease. With this knowledge comes the potential to develop new genetic tests that are capable of predicting the risk of disease or disability among presently healthy individuals. This information is potentially beneficial in that it may allow individuals to develop strategies to reduce their risk of illness and may allow health providers to recognize and treat the early stages of disease more effectively. As knowledge about genetic contributions to disease continues to grow and genetic testing technology becomes more widespread, there is a risk that personal genetic information could be used in ways potentially concerning to consumers. Genetic testing technology could potentially be used to discriminate against individuals in terms of their ability to obtain health, life, and disability insurance. Decreased access to insurance, in turn, significantly hinders access to health care and income for oneself and/or for one's dependent(s).

In addition to disability insurance purchased privately by individuals or employers, three other major types of disability insurance are available: Workers’ Compensation, Social Security Disability Insurance (SSDI), and Supplemental Security Insurance (SSI). The first two, Workers’ Compensation and SSDI, are available to individuals with work connections. The third, SSI, does not require a work connection.

Workers’ Compensation laws were initially passed to provide economic protection for workers and their families when a worker suffered an accident on the job resulting in an injury. The first laws passed were subject to court challenges based on their constitutionality. Ultimately courts approved the constitutionality of the Workers’ Compensation laws rationalizing that the laws created a compromise whereby an employee gave up her right to sue for a tort recovery in exchange for the employer's agreement to pay benefits without regard to the cause of the accident.

This project focuses on the extent to which disability insurers should be allowed to use genetic information in underwriting and rate-setting, but this subject cannot be completely isolated from the related questions of whether life and health insurers should also have this discretion. Federal and state laws place significant restrictions on insurers’ use of genetic information in health insurance, but regulation of such use in life and disability insurance is considerably more modest. This essay examines the reasons for this disparity and discusses the implications for future proposals to regulate disability insurers’ use of genetic information in underwriting and rate-setting. The thesis is relatively simple: Communitarian values are stronger in health insurance than in life and disability insurance. Accordingly, the public is likely to acquiesce to insurers’ insistence that they be allowed to make distinctions among insureds in disability insurance (and life insurance) that would not be tolerated in health insurance.