Founded in 2016, Ceteris Paribus is A student-led economics and finance publication at Davidson College.

Genetic Testing and Private Insurance

by Jack Shumway


When the Human Genome Project began in 1990, researchers and government officials believed it would finally provide a sort of skeleton key for understanding the phenomena of genetics and heritability. The HGP was a massive collaborative project dedicated to creating a list of every gene in the genome of humans and several model organisms. These researchers and government officials expected that comparing the nucleotide variations and mutations of other individuals against this template could elucidate the unidentified genetic basis of countless physical characteristics and diseases, enabling improved diagnoses and eventually personalized therapeutic strategies.

Unfortunately, soon after the publically funded, $3.3 billion project was completed, it became clear that a single fully-sequenced genome would be insufficient to discern the multitude of factors contributing to cumulative or “complex” traits and diseases like height and Down Syndrome, respectively. Rather, a pool of thousands of sequenced genomes, derived from a multitude of different ethnic, phenotypic, and disease-state contexts, would be needed to identify disease-contributing variants that might be possessed by less than 1% of the population. The Human Genome project initially indicated that the task of obtaining so much data would be a forebodingly expensive one, but in the years since an unprecedented rate of technological improvement has transformed the landscape of genomic sequencing and research.

While Moore’s Law, first used to describe the tendency of processing power to double (and its price to therefore halve) every two years, may be the benchmark of achievement in the world of computers, it pales in comparison to the declining cost of whole-genome sequencing in the post decade. Thanks to a $230 million grant scheme run by the US Human National Genome Research Institute, the cost of a fully sequenced genome dropped from about $9 million to mere thousands between 2007 and 2012. Building off the exceptionally productive case of public-private partnership, newly developed technological and computational methods allow the mapping of the exome (the gene-encoding portions of the significantly larger genome) for only hundreds of dollars. Quite unsurprisingly, this has led to an explosion in the genetic testing industry, which analysts expect to reach $10 billion in global sales within this decade.

Perhaps a more immediately significant outcome of this process, however, is the speed at which it drove genetic testing into the public sphere. Through genotyping, a technique empowered by fully-sequenced genomes and previous genetics research that focuses on ascertaining one’s possession of specific single-nucleotide variants or mutations, companies like 23andMe and can provide incredible insight into a customer’s family history or potential health risks for just $100 and a swab of saliva.  A great deal of concern, however, has developed surrounding what consumers likely misunderstand about the results of such tests and who exactly can see them. 

While cyber-security breaches and the scale of digitally-obtained personal information to third-party companies has made privacy a contentious issue for the internet, similar public awareness and debate has failed to emerge around genetic data.  Given the privacy of formal medical information, most consumers probably assume the intimate data provided by direct-to-consumer genetic testing companies remains privately held in a secure database. On the contrary, these companies are not only incapable of ensuring its privacy, but in many cases actively sell to outside parties. 23andMe, for example, has sold access to its database to at least 13 outside pharmaceutical firms, with one customer offering up $10 million for the genetic profiles of people suffering from Parkinson’s Disease alone. Other companies like Ambry Genetics make patients’ data publically available in databases, with the aim of allowing researchers “to discover a lot of new diagnostic targets and a lot of new drug targets.” None of these actions are illegal – the Health Insurance Portability and Accountability Act, a federal law passed in 1996, allows medical companies to share and sell patient data if it has been “anonymized,” or expunged of personal information. Were hackers to successfully breach a company’s database, however, they could not only seize a customer’s name, credit card information, and home address, but also the highly sensitive genetic information linked to it—a repercussion far more serious than those of usual security breaches.

Hacking aside, sharing customer’s anonymized genomic information would not necessarily raise red flags alone. Indeed, improved access to genomic data would undeniably aid the efforts of medical technology and pharmaceutical companies to identify new therapeutic targets and design novel treatment strategies. Deeper analysis, however, elicits serious concern over the concept of “genetic discrimination,” especially in the context provided by a federal law recently introduced by the G.O.P. The Preserving Employee Wellness Programs Act would make it harder to keep employers from getting access to their personal medical and genetic information through “voluntary wellness programs,” of which opting out could lead to financial penalties.  Corporations defend these wellness programs, which often ask employees to undergo health screenings and medical assessments, by asserting that they keep workers healthier and help to cut insurance costs. This claim appears to check out, since early detection of diseases like cancer often allow more effective, faster, and less invasive treatments.

Still, the bill has already provoked heated opposition from a range of health, privacy, and consumer advocacy groups. This comes as little surprise—if employers could reject a candidate’s application based on their possibility of developing a particular ailment, judging from imperfect technology and interpretations, their potential inability to find employment and thus afford independent coverage would only amplify the health-wealth gap. Further, if insurance companies were to again become fully privatized through a revised American Health Care Act, it would become conceivable for insurers to treat potential conditions similarly to pre-existing ones. More specifically, they could use the information to charge higher rates or even deny coverage—a situation creeping eerily close to eugenics.

It has taken about 20 years for internet privacy policy to catch up with the technology itself. Americans should either push to make sure the protection of their life code comes far sooner or take appropriate caution, lest the consequences of losing ownership of this information grow worse than they ever could have anticipated.

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