Genetic Information and Long-Term Care Insurance

By Elaine A. Lisko, Health Law & Policy Institute

Persons suffering from prolonged, debilitating illnesses, like Alzheimerís disease, often require continued care in nursing facilities. As the population ages, long-term care demands can be expected to increase. In Texas alone, for example, there are currently over 265,000 individuals with Alzheimerís. By the middle of the next century, this number is expected to more than double.

In the past, Medicaid paid for approximately 50% of long-term care costs. Individual personal assets accounted for a little over 30%. However, Congressí recent efforts to reduce Medicaid and Medicare spending can be expected to shift more costs to the private sector, either in the form of personal assets or long-term care insurance.

The cost of care for a year in a nursing home currently ranges from $30,000 to $100,000, depending on location. Few can afford to bear this cost directly for any extended period of time. Newspaper and television reports describe how families deplete their assets to cover the cost of long-term care. As a result, reliance on long-term care insurance can be expected to increase.

Whether this reliance will be well founded depends, in part, on whether state legislatures allow long-term care insurance providers to have unrestricted access to and use of the aging populationís genetic information. If insurers are allowed to require an individual to undergo genetic testing as a condition of long-term care insurance without restriction, discrimination is likely.

The insurers will be able to determine an individualís predisposition for diseases like Alzheimerís and deny coverage based upon this determination. Alternatively, the insurers may set the individualís premium at so high a rate as to effectively deny insurance. Under either scenario, those potentially most in need of long-term care insurance will find themselves unable to obtain it.

Legislation prohibiting insurers from discriminating based upon genetic information may eliminate this potential problem. However, at present, the majority of states do not regulate the use of such information in the issuance of long-term care insurance. Moreover, six states expressly or impliedly allow the use of such information by long-term care insurers.

Only two states prohibit either use or testing. Colorado prohibits use. Vermont allows use of test results, provided such use is actuarially fair, but prohibits testing. A handful of states are contemplating similar legislation restricting use or testing. Clearly, further, more comprehensive action is called for before the aging population, especially those who may suffer from Alzheimerís, doubles.

The following table is intended to illustrate the current, reported state of the law on the use of genetic information in issuing long-term care insurance:
California Cal. Ins. Code § 10233.2(a) & (d) Impliedly allows testing Prohibits cancellation, nonrenewal, or termination of long-term care insurance on the grounds of age or mental or physical deterioration; also prohibits denial of benefits to an insured diagnosed as having significant destruction of brain tissue with resultant loss of brain function, including Alzheimerís; buts provides that the prohibition on denial of benefits does not modify any preexisting condition or underwriting standards and does not preclude or limit underwriting in accordance with an insurerís established underwriting standards.
Colorado Colo. Rev. Stat. § 10-3-1104.7(3) (b) Prohibits use Prohibits entity receiving genetic testing information from using it for any underwriting purpose connected with the provision of long-term care insurance coverage.
Delaware S.B. 337 (Senate Amendment No. 1 placed with bill on 6/17/98) Prohibits testing Prohibits persons from requiring a genetic test as a condition of obtaining or keeping long-term care insurance and from using the results of any subsequent genetic test to cancel or alter existing insurance.
Hawaii S.B. 2160 (To Senate Committee on Commerce, Consumer Protection and Information Technology on 1/23/98) Prohibits use  Prohibits use of genetic information to deny or limit coverage or establish eligibility, continuation, enrollment or premium payments in connection with long-term care insurance (however, caption of statute bill seeks to amend (§ 431:10A-118) appears to limit scope to health insurance coverage).
Kansas Kan. Stat. Ann. § 40-2259(b)-(d)

H.B. 2734 (To House Committee on Insurance on 1/29/98)

Expressly allows testing

Prohibits testing

Prohibits an insurer from requiring or requesting a genetic test or the results of any such test or conditioning coverage, determining rates or any aspect of coverage on whether such test has been obtained, but excepts an insurer writing long-term care coverage from the prohibition on requiring or requesting a genetic test or test results. Nevertheless, a long-term care insurer that requires or requests such test or test results is limited to using the information obtained in compliance with the statute or in a way that ensures that the rates or other conditions set are reasonably related to the risk involved.

Proposes to amend Section 40-2259 to delete exception granted to long-term care insurers from prohibition. [Interestingly, the proposed amendment was filed less than seven months after Section 40-2259 became law].

Louisiana La. Rev. Stat. Ann. § 22:1214 (23) Impliedly allows testing Classifies discrimination based upon genetic information as an unfair or deceptive act or practice in the business of insurance, but excepts actions taken in the ordinary course of business in connection with the sale, issuance or administration of long-term care insurance from this classification.
New Hampshire N.H. Rev. Stat. Ann. §§ 141-H:3(I) & (V) & 141-H:5(II)


Expressly allows testing Section 141-H:3 prohibits the use of genetic testing in employment situations, but excepts testing for evidence of insurability with respect to long-term care insurance under the terms of an employee benefit plan from this prohibition. Section 141-H:5 provides that long-term care insurers that obtain information from genetic testing shall not use that information in writing a type of insurance coverage other than life, disability income or long-term care insurance.

[Interestingly, in 1997, the New Hampshire Legislature considered amending Sections 141-H:4 and 141-H:5. The amendment to Section 141-H:4 would have prohibited an insurer from requiring genetic testing as a condition of coverage for long-term care insurance as well as health insurance. The amendment to Section 141-H:5 would have deleted the reference to long-term care insurance in the exception to the prohibition on the use of such information in connection with the writing of coverage. The bill (H.B. 241) passed in the House but failed to pass in the Senate. It was not carried over to the 1998 session]. 

New Mexico H.B. 331 (Signed into law by the governor on 3/9/98) Expressly allows testing Enacts "Genetic Information Privacy Act;" removes use of genetic information by an insurer in the ordinary conduct of business in connection with long-term care insurance from prohibition against genetic discrimination, provided the use is based on sound actuarial principles or related to actual or reasonably anticipated experience.
Texas Tex. Ins. Code art. 21.73, §§ 2(b)(5) & (3)(a) Impliedly allows testing Excepts long-term care insurance from the prohibition on the use of genetic information to reject, deny, limit, cancel, refuse to renew, increase the premiums for or otherwise adversely affect eligibility for coverage under a group health benefit plan, unless the Commissioner of Insurance determines that the benefit coverage is so comprehensive that it constitutes a group health benefit plan.
Vermont H.B. 89 (Signed into law by the governor on 4/29/98) Prohibits testing but allows use Enacts chapter 217 of Title 18 governing genetic testing; Section 9334 of that chapter prohibits underwriting or conditioning any insurance policy offered or issued in the state based upon a requirement to undergo genetic testing or to disclose the results of any such testing, subject to certain limitations; also amends Section 4724 of Title 8 prohibiting unfair discrimination based upon genetic test results where no relationship exists between the medical information and the cost of the insurance risk.