I posted yesterday that I couldn’t see how an insurance-based model of health care could survive cheap genome sequencing. My logic was, that no insurance company with a proper sense of responsibility to its shareholders would offer me an insurance policy without taking a good look at my genome, to see if (for example) I was a person highly likely to develop heart trouble in my forties.

A reader who says he has a Ph.D. in genetics offers the following:

“When individual genome sequencing becomes truly cheap, we will quickly learn that we all are at risk for SOMETHING. Assuming that health insurance providers are not foolish enough to offer cancer insurance to one person, and Alzheimer’s insurance to another person, then the risk sharing model will continue to work. It might even work better, if more young, healthy people are able to see their own risk factors and therefore buy health insurance they don’t yet need.”

I don’t know what would be “foolish” about insurance companies targeting policies in the way he suggests. It seems to me that’s exactly what they should do, if they have sufficient information. His point about the risk sharing model is more interesting. The trouble with risk sharing models is “leakage.” You insure a group of a thousand people at a fixed rate per, the healthy ones taking some load for the unhealthy ones. Trouble with that is that ceteris paribus a healthy person who opts out and cuts his own deal with the insurer should get a lower rate. In the USA today the ceteris is far from paribus because of legislation like ERISA and COBRA favoring group plans. This is just the enforcing of bad math by government fiat, though–always an unstable situation, and surely likely to become much more so when we have an order-of-magnitude increase in our knowledge of individual risk factors.

And there is no telling how far this could go. We are already turning up genetic factors in human personality. What if, five or ten years from now, a cheap genome sequencing could identify bad drivers? Would good drivers be willing to pay elevated insurance rates on their behalf?