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Self‐Insurance With Genetic Testing Tools
Author(s) -
Crainich David
Publication year - 2017
Publication title -
journal of risk and insurance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.055
H-Index - 63
eISSN - 1539-6975
pISSN - 0022-4367
DOI - 10.1111/jori.12085
Subject(s) - adverse selection , pooling , rothschild , genetic testing , actuarial science , selection (genetic algorithm) , risk pool , health insurance , economics , business , insurance policy , computer science , key person insurance , health care , biology , genetics , archaeology , artificial intelligence , history , economic growth
Abstract The development of genetic testing creates opportunities to better target disease prevention actions. In this article, we determine how the genetic information modifies self‐insurance efforts in different health insurance market equilibria with adverse selection. We show that a regulation prohibiting insurers from using genetic information for rate‐making purposes: (1) cancels the benefits of genetic testing when pooling equilibria occur and (2) does not prevent the exploitation of the benefits derived from genetic testing when separating equilibria (both of the Rothschild‐Stiglitz or of the Miyazaki‐Spence type) prevail in insurance markets.