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Article: ESTIMATING ADVERSE SELECTION COSTS FROM GENETIC TESTING FOR BREAST AND OVARIAN CANCER: THE CASE OF LIFE INSURANCE.(Brief Article)
- Article from:
- Journal of Risk and Insurance
- Article date:
- December 1, 1999
- Author:
CopyrightCOPYRIGHT 1999 American Risk and Insurance Association, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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ABSTRACT
Genetic testing is a concern for insurers if they cannot use test results in underwriting. We model adverse selection in an insurance market with genetic testing for breast and ovarian cancer. Increased forces of mortality resulting from a family history of cancer or a positive test for a BRCA mutation are calculated. Using a Markov model, we estimate costs of adverse selection, assuming various testing and insurance purchase behaviors. Adverse selection should be controllable if companies apply strict underwriting rules, requesting cancer history and onset age for all first-degree relatives. If insurers fail to correctly identify the family history of ...
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