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Genetic testing, income distribution and insurance markets, CHERE Working Paper 2006/3

Ray Rees and Patricia Apps ()

Working Papers from CHERE, University of Technology, Sydney

Abstract: This paper analyses the policy implications for health insurance markets of the development of genetic testing. A central issue surrounding this development is whether insurers should be allowed access to the information provided by such tests. The paper first shows that on efficiency grounds alone, insurance buyers should be allowed voluntarily to supply this information to insurers. The source of the considerable opposition to this proposal is really the distributional implications: those with the worst genetic endowments will as a result have to pay the highest insurance premiums. The paper then goes on to analyse possible redistributional policies that can remedy this. In doing so, it makes a significant departure from the mainstream literature on adverse selection in insurance markets, by assuming that individuals have differing income endowments.

Keywords: health insurance; genetic testing (search for similar items in EconPapers)
JEL-codes: I11 (search for similar items in EconPapers)
Date: 2006-07
New Economics Papers: this item is included in nep-hea and nep-ias
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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http://www.chere.uts.edu.au/pdf/insurance.pdf First version, 2006 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:her:chewps:2006/3

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