The second definition is what they term “actuarial definition” i.e. “an all-purpose descriptor for the practice of making distinctions” and to this they attach the notion that irrationality is the basis of social unacceptability and therefore “only irrational distinctions should be socially unacceptable”.[3] Furthermore, with specific reference to the insurance industry they explain that “discrimination only becomes problematic where there is no sound actuarial basis for the manner in which risks are classified, or individuals with equivalent risks are treated differently”.[4]
Under these definitions, the distinction made is fairly intuitive and particularly so in the cases of asymptomatic individuals who essentially fulfill both types of discrimination. After all, while a phenotype is the existing expression of a particular genotype by a cell or an individual, a genotype by contrast appears to be a potentiality. And according to the authors “[a] large majority of the public considers discrimination against these [asymptomatic] individuals as unfair because current opportunities are being denied to seemingly unaffected individuals merely because a genetic test or assessment indicates an increased risk of future incapacity.”[5]
There are, thus, effectively two manners in which we can conceptualize this distinction. Firstly, that it is definitional/formal distinction as defined above. Alternatively, that it is a functional one i.e. the distinction is made because it fits certain positive and normative criteria. Therefore, under this notion, a rigid adherence to the formal genotype/phenotype distinction is to lose sight of what the distinction sought to do in the first place i.e. to distinguish between what is or is not genetic discrimination.
On the issue of reconciling the genotype/phenotype distinction to the Court, in Katskee v. Blue Cross/Blue Shield of Nebraska,[6] determining that Katshee’s familial susceptibility as a “disease” for the purposes of coming within the insurance contract, it cannot be ignored that this was a review of a summary judgment and therefore the court automatically “views the evidence in a light most favorable to the nonmoving party and gives that party the benefit of all reasonable inferences deducible from the evidence”.[7]
But more importantly, this was a court simply construing and interpreting this insurance contract like they would in any other form of a contract i.e. in accordance with general principles of construction and will be “guided by definitions found in dictionaries and additionally by judicial opinions rendered by other courts which have considered the meaning of these terms”.[8] And therefore, based upon various lay and medical dictionaries, as well as judicial decisions having defining the term (‘disease’) broadly, there was a resulting attribution on the part of the insurer to also adopt that broad interpretation.[9] As such, it would appear hard to square a logical and principled distinction with what is ultimately a pure legal categorization.
Nevertheless, based on the “functional” distinction, the decision is arguably consistent insofar as it would have been unfair under the circumstances to treat Katskee differently simply because her condition was that of a genotype and not phenotype. By focusing merely upon the “predisposition to an illness (cancer)”, as Blue Cross would have done, is to blithely ignores insurable diseases/conditions/illnesses such as hypertension (high blood pressure) or a high cholesterol level which in and of themselves are not harmful per se but have a similar (albeit higher) chance of developing into cardiovascular diseases and higher risks of cardiovascular accidents. This bears directly on “actuarial discrimination” as it is treating equivalent risks differently. Seen in that light, it is unfair that the lack of “symptoms” would deny Katskee “the most medically appropriate treatment available”.[10]
While it cannot be denied that insurers are legitimately allowed to inquire into one’s family history of hypertension and high cholesterol levels and thereby adjust premiums accordingly, but the underlying point is that in those cases, a predisposition is sufficient for the insurer to pay for medication e.g. Lipitor that is in effect a preventive measure.
Nonetheless, there is a very appealing logical symmetry in the argument that if Blue Cross is prohibited from discriminating against Katskee on the basis of genotype, then it should be absolved from paying for services associated with that genotype unless it has actually manifested in pathology. In fact, one could go even further and argue that in this instance, it is not even an insured risk and therefore, they ought not to be liable, manifestation of pathology or not. That basis would be it is an unfair bargain insofar as insurance is a pricing of risks through premiums; that it is a private industry with the basic motive of profit maximizing; and that without the ability to discriminate on the basis of genotype, it is unable to price that risk effectively.
But it is submitted that there are a number of justifications, legal or otherwise, that support the case and the proposition residing within it and on balance justifies supporting it. Firstly, and most fundamentally, it cannot be the intent of the legislature, having outlawed genetic discrimination in health care insurance to somehow allow genetic discrimination in through the backdoor as it were by allowing insurers to reject medical treatments on the basis of said genetic condition. Secondly, the legal reasoning is not flawed if one accepts the basic premise of the broad scope of the terms e.g. disease/illness as judicially defined previous and variously in the dictionaries. This is linked to the fact that the insurers are the ones controlling what is in essence a standard form, with the corollary that what one controls, one can amend. And in this instance they have chosen to adopt a broad definition keeping in mind that they always had the power to amend it and therefore the court is not acting in an arbitrary and capricious fashion by holding them to their own bargain.
Alternatively, there are fairly strong economic arguments to be made. This is because prevention is almost invariably cheaper than a cure when it comes to a major surgical procedure (and/or the associated radiotherapy or chemotherapy in this factual matrix) with cancer as opposed to a major surgical procedure without cancer (and without the associated radiotherapy or chemotherapy). In a sense then, Blue Cross would have been unjustly enriched if they did not have to pay the cost of the surgery because they would likely have had avoided having to pay for the higher cancer related courses down the road if Katskee had not undergone the treatment in the first place.
It is further submitted that such economic cost-benefit analysis is particularly justified seeing as how our examination is that of a private enterprise and this is a readily identifiable quantification.
It will not be denied that this cost calculus changes if, as in the hypothetical facts given, Katskee’s family history is in fact not characteristic of early onset cancers. In which case, the immediate argument above suffers given the market of heath insurance i.e. short-term with high turnovers, as it will not be Blue Cross that is unjustly enriched but whichever health insurer that Katskee would be under during the time she would have had suffered the cancers.
However, in contrast to this monetary balance, it is worth noting one of the reasons on which the court bases its eventual holding is that “the diagnosis may encompass symptoms of anxiety and stress, which some women experience because of their knowledge of the substantial likelihood of developing cancer”.[11] And it can be said to lose sight of the individual in a system, particularly that of health care runs contrary to the its entire notion. And further, one might well argue that it would be cruel to withhold an early treatment on the basis that it is not cost-effective.
In the end, however, these argument probably do not change the outcome of the case. Legally, the test of whether a “condition which itself constitutes a predisposition to another illness is necessarily an illness within the meaning of an insurance policy”,[12] is not when the eventuality occurs but where it is “so remote in its potential mischief that common speech would not label it a disease or infirmity”.[13] Therefore, the lack of an early onset is not a bar to recovery for the preventive surgery.
Personally, the crux of this issue as this author sees it is whether this early surgical intervention is “the most medically appropriate treatment available”. As long as it is, the relatively lateness of the onset ought not to be a factor. And in addition to that, one might well imagine how it could readily be imputed into the overall calculations as to whether it is indeed “the most medically appropriate treatment available”.
Thus even if it should be economically unfair and disadvantageous to this particular insurer, as it might well be given the reasons above, and even should adverse selection occur such that the cost of premiums rises across the pool, this is an acceptable price to pay given the long term societal good that is being accrued through early prevention and intervention. And if as a result consumption of insurance falls, then it falls to the government and in particular their role to encourage societal optimal consumption through subsidies if need be,[14] especially where there is long term benefit to be gained.
In contrast, for patients like Karen Schmidt,[15] whose medical histories serve as indirect evidence of their genetic information, their exclusion is variously either “fair” or “unfair” depending on the viewpoint from which one analyzes the situation. For example, if one considers her situation in vacuo, it is not necessarily unfair discrimination given the bases on which the insurance company operates on. On the other hand, if one takes into account existing laws against genetic discrimination and the manner in which the market for health insurance works, then it is definitely unfair vis a vis her opportunities in relations to a) others with an equivalent health risk in pure genotype without her medical background and b) the discrepancy in terms of health disclosure between group health and private health insurance.
To return to definitions, Rothstein/Anderlik define “unfair” discrimination (as subsumed by their categorization of what constitutes genetic discrimination) as “drawing a distinction among individuals or groups plus an element of either irrational or socially unacceptability or both”.[16] In contrast, Rich/Ziegler would simply distinguish between fair and unfair discrimination on the basis of whether it is reasonable and lawful.[17] They believe that “insurance discrimination” to be lawful because it does not flout the Equal Protection Clause under the 14th Amendment of the US Constitution on its face, or the judicial interpretations of that Amendment.[18] And they see it as reasonable on the basis that risk classification is perfectly rational within the insurance community and in fact essential to prevent asymmetric information leading to adverse selection and the potential injury not simply to the industry itself but to healthcare in general.[19]
Adverse selection refers to a situation whereby the insured takes on a disproportionate amount of insurance, which is the result of the insurer not knowing what the insured knows and therefore cannot price the insurance premiums accordingly. This skews the market in such a fashion that the insurer would need to raise insurance premium rates across the board simply because there is no way of readily identifying such adverse selectors. And where adverse selection is a big problem as is with the case of anti-genetic discrimination laws, this then raises the incentive for insurers to crack down hard on any adverse selectors they may find and increases their risk adversity, particularly towards individuals.[20]
And thus it would appear that the key difference between the definitions by Rothstein/Anderlik and Rich/Ziegler is apparently that something that is societally unacceptable might still constitute “fair” discrimination because in this instance, adverse selection poses a big enough issue that societal disavowal of genetic discrimination ought to be set aside.
And since a history of breast cancer at 35 is probably a significant issue from an actuarial standpoint, therefore it appears as a reasonable basis as a criterion for discrimination. This is especially so coupled with the fact that her mother and sisters had experienced either breast or ovarian cancer, which was sufficient for her doctor to recommend genetic testing to determine whether she has a BRCA1/2 mutation. That unfortunate confirmation meant that it puts her at high risk of breast and ovarian cancer. This in turn places her at a fairly huge variance in terms of health risk from an otherwise “normal” female of her age.
So assuming that there were no genetic discrimination laws and further assuming that there were no difference in obtaining insurance coverage whether on an individual basis or through an employer, the exclusion of a patient like Karen is not necessarily unfair primarily because she did shop around for insurance. And it is on the record that one of the reasons why she applied to Fortis was the fact that the application only asked for medical history for the past 10 years, which allow her to truthfully withhold her medical history to a certain extent.[21]
But even in this hypothetical world it can be said that since the form was controlled by Fortis and it was well within their power to have extended the time frame for which medical conditions/consultations etc. needed to be disclosed but they made a conscious decision to limit it to ten years instead. Secondly, if insurers were free to treat genetic information just like any other form of information, we are probably less likely to see such need for evasive maneuverings primarily because it would be firstly a lot harder to get round a request for a genetic test for example, but much more pertinently, because of the reduced likelihood of adverse selection, companies will likely to be less restrictive in terms of eligibility and would simply price risk accordingly with premiums or with exclusions.
But in the current system, there is little doubt that Karen was subjected to “unfair” i.e. unreasonable, discrimination in totality, us taking into account the market structure, existence of genetic discrimination laws and the lack of a need for health information in obtaining coverage through an employer. The last factor of which is especially egregious because they is simply no rational explanation to lay a reasonable basis to distinguish the two situations.
Furthermore, Karen is in a particularly vulnerable state because of the existence of genetic discrimination laws. If, for example, she had not had her particular medical history but underwent genetic testing to determine her BRCA1/2 mutation, she could not be denied health insurance coverage under the HIPAA since it provides guaranteed enrollment for eligible individuals, regardless of their health status.[22] Or even for that matter the Wisconsin Statute on Restrictions on Use of Genetic Test Results which forbids, through section (1) and (2)(c) and (d), an insurer from using a genetic test from either considering eligibility or condition rates or coverage on the basis of either a genetic test or what the results of those were. But instead under her current situation, she can be forced to reveal her genetic information indirectly through disclosure of her medical history and can thus be denied insurance. While difficulty in obtaining insurance does not necessarily mean impossibility of obtaining insurance, nevertheless, the comparison is startling in its likely effects.
This actually places her in a worse position then if such laws had never existed because of the market structure in healthcare insurance. Such a structure where the major costs to the company are short term medical expenses and wherein their customers purchase them only for a short term and with a resultant high turnover creates the increased problem of adverse selection vis a vis the anti-genetic discrimination laws because it arguably makes customers such as Karen much less attractive and it becomes in their interest not to take her as a customer, particularly when she was in the market for long-term health insurance.[23]
But at the heart of it, what makes her exclusion so unreasonable is that there was no need to actually rescind her insurance contract. After all, if insurance is the pricing of risk, the reasonable thing to do would have simply been to renegotiate the contract and basically raise the premium. This argument is strengthened if one of our criteria for what constitutes unfair is societal unacceptability and this at the very least, on balance, one such situation.
There is no denying that the entire insurance pool being made to pay higher average premiums as a result of adverse selection may well be economically unfair on the basis that the individual is subsidizing someone else’s risk and disadvantageous in the sense that it could trigger a spiral that could well destroy the entire industry because every rise in average premiums causes more people to drop out which in turn forces higher average premiums.
At this juncture, an interesting question may be raised: “Is Schmidt the mirror image of Katskee?” by virtue of the fact that when Fortis rescinded her insurance coverage, they are doing so ostensibly on grounds of her phenotype even though in actuality it is very likely that the real reason was her genotype. After all, the remedy sought by Fortis was that of equitable rescission on the basis of a fraudulent misrepresentation i.e. misrepresenting that she did not have a history of breast cancer and treatment, which is her phenotype. Yet it must be that their real concern is that of her genotype or more accurately her future risks, because if her genotype were not at issue, there would be no real reason to rescind her contract since after all an insurance company is primarily profit oriented and if priced right, every contract represents profits for the company.
But regardless, it does cast doubt on the sustainability of the genotype/phenotype distinction as the definitional determination of genetic discrimination except insofar as it pertains to pre-employment or pre-insurance coverage. Instead, once insurance coverage is had, the definitional distinction ought to give way to the functional distinction in order to effectuate society’s beliefs on why genetic discrimination is impermissible.
What Karen’s case represents is a challenge to genetic exceptionalism in insurance, this idea that genetic information is somehow fundamentally different from other forms of medical information such that it warrants special protection, primarily through anti-genetic discrimination laws. The danger of this approach is that it in fact creates a form of medical underclass, a class for whom truthful information garnered by lawful means provides insurers with their genetic information. One solution may further extend the ambit of protection to patients like her. However, that in turn fundamentally undermines the notion of genetic exceptionalism, which has a cascading effect on genetic anti-discrimination laws in general.
While it is tempting to conclude that such a situation remains rooted in the peculiar health care system within the
[1] Mark A. Rothstein & Mary R. Anderlik, ‘What is Genetic Discrimination, and When and How Can it Be Prevented’ in Kuszler et. el., Genetic Technologies and the Law, (Caroline Academic Press, 1st ed.), p. 91-94
[2] Ibid, at p. 91-92
[3] Supra n. 1 at p. 92
[4] Ibid.
[5] Ibid.
[6] 515 N.W.2d 645 (
[7] Ibid., at 203
[8] Supra n. 6 at p. 204
[9] Supra n. 6 at p. 204 - 205
[10] Supra n. 6 at p. 202
[11] Supra n. 6 at p. 206
[12] Supra n.6 at p. 207 citing Silverstein v. Metropolitan Life Ins. Co., 171 N.E. 914 ([N.Y.] 1930)
[13] Ibid. per Cardozo CJ writing for the court
[14] As is the case for primary and secondary education, which tend to be under-consumed in a free market.
[15] Schmidti v. Fortis Insurance Co., 349 F. Supp. 2d 1171 (N.D. Iowa 2005), extracted in Kuszler et. el., Genetic Technologies and the Law, (Caroline Academic Press, 1st ed.), p. 170-190
[16] Supra n. 1 at p. 92. Although as previously mentioned, they accept that society accepts discriminations that are irrational but might well condemn discrimination that are rational
[17] Robert F. Rich & Julian Ziegler, ‘Genetic Discrimination in Health Insurance for a (Not So) Special Problem?’ in Kuszler et. el., Genetic Technologies and the Law, (Caroline Academic Press, 1st ed.), p. 213-239
[18] Ibid., at p. 214 citing Lindsley v. Natural Carbonic Gas Co.
[19] Supra n. 16 at p. 215-216
[20] This is to account for companies that might specifically target high risk groups or the so-called state subsidized non-profit “high-risk pools” which seeks to bridge the gap between very high premiums that these people can’t afford or are simply rejected outright
[21] Supra n. 14 at p. 173
[22] Supra n. 16 at p. 225.
[23] Supra n. 14, see fn. 1 at p. 171
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