Working Paper: NBER ID: w15326
Authors: Emily Oster; Ira Shoulson; Kimberly Quaid; E Ray Dorsey
Abstract: Individual, personalized genetic information is increasingly available, leading to the possibility of greater adverse selection over time, particularly in individual-payer insurance markets; this selection could impact the viability of these markets. We use data on individuals at risk for Huntington disease (HD), a degenerative neurological disorder with significant effects on morbidity, to estimate adverse selection in long-term care insurance. We find strong evidence of adverse selection: individuals who carry the HD genetic mutation are up to 5 times as likely as the general population to own long-term care insurance. We use these estimates to make predictions about the future of this market as genetic information increases. We argue that even relatively limited increases in genetic information may threaten the viability of private long-term care insurance.
Keywords: No keywords provided
JEL Codes: D82; I11; I18
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Increased genetic information (Y50) | Significant shifts in insurance market dynamics (G52) |
| Individuals who carry the HD genetic mutation (I12) | Increased likelihood of owning long-term care insurance (G52) |
| Knowledge of one's genetic risk (D80) | Influences insurance purchasing behavior (G52) |