How is the trade-off between adverse selection and discrimination risk affected by genetic testing? Theory and experiment

We develop a theoretical analysis of two widely used regulations of genetic tests, Disclosure Duty and Consent Law, and we run an experiment in order to shed light on both the take-up rate of genetic testing and on the comparison of policyholders’ welfare under the two regulations. Disclosure duty forces individuals to reveal their test results to insurers, exposing them to a discrimination risk. Consent Law allows them to hide any detrimental information, resulting in adverse selection. The experiment results in much lower genetic tests take-up rates with Disclosure Duty than with Consent Law, showing that subjects are very sensitive to the discrimination risk. Under Consent Law, take-up rates increase with the adverse selection intensity. A decrease in the test cost, and in adverse selection intensity, both make it more likely that Consent Law is preferred to Disclosure Duty. © 2019 Elsevier B.V.

• Fecha de publicación: 2019
• Institución: Universidad del Rosario
• Repositorio: Repositorio EdocUR - U. Rosario
• Idioma: eng
• OAI Identifier: oai:repository.urosario.edu.co:10336/22363
• Acceso en línea: https://doi.org/10.1016/j.jhealeco.2019.102223; https://repository.urosario.edu.co/handle/10336/22363
• Palabra clave: Ethics; Experiment; Genetics; Health insurance; Law enforcement; Theoretical study; Trade-off; Adult; Article; Genetic screening; Genetic susceptibility; Health insurance; Personalized medicine; Welfare; Consent law; Disclosure duty; Personalized medicine; Pooling health insurance contracts; Test take-up rate
• License: Abierto (Texto Completo)