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Genetic adverse selection: Evidence from long-term care insurance and Huntington disease

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  • Oster, Emily
  • Shoulson, Ira
  • Quaid, Kimberly
  • Dorsey, E. Ray
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    Abstract

    Individual, personalized genetic information is increasingly available, leading to the possibility of greater adverse selection over time, particularly in individual-payer insurance markets. We use data on individuals at risk for Huntington disease (HD), a degenerative neurological disorder with significant effects on morbidity, to estimate adverse selection in long-term care insurance. We find strong evidence of adverse selection: individuals who carry the HD genetic mutation are up to 5 times as likely as the general population to own long-term care insurance. This finding is supported both by comparing individuals at risk for HD to those in the general population and by comparing across tested individuals in the HD-risk population with and without the HD mutation.

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    File URL: http://www.sciencedirect.com/science/article/B6V76-50CVPX5-2/2/b199a3efe8c05d1295bf8253cb305327
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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Public Economics.

    Volume (Year): 94 (2010)
    Issue (Month): 11-12 (December)
    Pages: 1041-1050

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    Handle: RePEc:eee:pubeco:v:94:y:2010:i:11-12:p:1041-1050

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    Web page: http://www.elsevier.com/locate/inca/505578

    Related research

    Keywords: Adverse selection Long-term care insurance Huntington disease Genetic testing;

    References

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    Cited by:
    1. Jeffrey R. Brown & Amy Finkelstein, 2011. "Insuring Long-Term Care in the United States," Journal of Economic Perspectives, American Economic Association, vol. 25(4), pages 119-42, Fall.
    2. Raj Chetty & Amy Finkelstein, 2012. "Social Insurance: Connecting Theory to Data," NBER Working Papers 18433, National Bureau of Economic Research, Inc.
    3. Michael Kremer & Christopher M. Snyder, 2013. "When Is Prevention More Profitable than Cure? The Impact of Time-Varying Consumer Heterogeneity," NBER Working Papers 18862, National Bureau of Economic Research, Inc.

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