Estimating Adverse Selection Costs from Genetic Testing for Breast and Ovarian Cancer: The Case of Life Insurance

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dc.contributor.authorSubramanian, Krupa
dc.contributor.authorLemaire, Jean
dc.contributor.authorHershey, John C
dc.contributor.authorPauly, Mark
dc.contributor.authorArmstrong, Katrina
dc.contributor.authorAsch, David A
dc.date2023-05-17T18:44:57.000
dc.date.accessioned2023-05-22T12:32:26Z
dc.date.available2023-05-22T12:32:26Z
dc.date.issued1999-12-01
dc.date.submitted2017-10-13T09:54:00-07:00
dc.identifier.urihttps://repository.upenn.edu/handle/20.500.14332/5231
dc.legacy.articleid1176
dc.legacy.fulltexturlhttps://repository.upenn.edu/cgi/viewcontent.cgi?article=1176&context=bepp_papers&unstamped=1
dc.rightsGenetic 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 the application and use it in pricing, adverse selection costs could become unbearable.
dc.source.beginpage531
dc.source.endpage550
dc.source.issue5
dc.source.issue4
dc.source.journalBusiness Economics and Public Policy Papers
dc.source.journaltitleThe Journal of Risk and Insurance
dc.source.peerreviewedtrue
dc.source.statuspublished
dc.source.volume66
dc.subject.otherBusiness
dc.subject.otherEconomics
dc.subject.otherPublic Affairs, Public Policy and Public Administration
dc.titleEstimating Adverse Selection Costs from Genetic Testing for Breast and Ovarian Cancer: The Case of Life Insurance
dc.typeArticle
digcom.contributor.authorSubramanian, Krupa
digcom.contributor.authorLemaire, Jean
digcom.contributor.authorHershey, John C
digcom.contributor.authorPauly, Mark
digcom.contributor.authorArmstrong, Katrina
digcom.contributor.authorAsch, David A
digcom.identifierbepp_papers/5
digcom.identifier.contextkey10896357
digcom.identifier.submissionpathbepp_papers/5
digcom.typearticle
dspace.entity.typePublication
upenn.schoolDepartmentCenterBusiness Economics and Public Policy Papers
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