Life insurers banned from denying cover based on genetic testing
Insurers will no longer be able to use genetic test results to deny life insurance cover or increase premiums, with a total ban to be introduced by the government.
Earlier this year, the government consulted on the use of genetic test results in underwriting life insurance policies, looking to address concerns around discriminatory practices, underinsurance, and a growing aversion among Australians to seeking possibly life-saving genetic testing.
In 2019, a moratorium was introduced on the requirement to disclose the results of genetic tests to insurers when applying for cover. This was because there were concerns consumers would not undertake testing if they thought it might adversely impact the cost of their insurance.
Under the moratorium, insurers could only request or use the results of a genetic test if the total amount of cover for an individual - including that being applied for and any other existing cover, like group insurance, met certain thresholds.
For instance, insurers can use results where the total amount of lump sum death cover is greater than $500,000. However, in 2023 APRA statistics show the average sum of insured individual policies of lump sum death cover - excluding group cover - was about $714,000.
The government received more than 1000 submissions, almost all of which were in favour of a total ban. The ban, which is to be reviewed every five years, will not be subject to any financial limits, caps, or exceptions.
"Genetic testing can be a life-saving step for members of the community. This valuable technology supports medical practitioners to prevent, diagnose, treat, and monitor a range of heritable conditions, cancer predisposition syndromes, and cancers," says Minister for Financial Services Stephen Jones.
"No Australian should be discouraged from undertaking testing out of fear it may impact their ability to get life insurance.
"This decision places Australia as a world leader in removing barriers to genetic testing by stopping the use of adverse predictive test results in life insurance."
Other nations have already banned the use of genetic test results in underwriting, including Canada in 2017.
Council of Australian Life Insurers chief executive Christine Cupitt says the association fully supports the ban.
"Australia's life insurers have never wanted to do anything to discourage people from taking genetic tests and accessing the information they need to make informed choices about their health," she says.
"Australia's life insurers put in place an industry standard back in 2019 to control how they use genetic tests. Five years on, genetic testing is becoming more common in our community, cheaper to access and increasingly helping people manage or even avoid hereditary conditions. Now is the time for strict government regulation.
"We're pleased to see this announcement includes a five-year review of the legislation. This will be essential to ensuring the law keeps pace with advancements in genomic science and the way genetic tests are used in the future."
The government's consultation on the issue came on the back of a report by Monash University, reviewing the use and impact of the moratorium. Concerns raised included insurers still requesting test results regardless of whether applications fell below the dollar-based thresholds, and the fact the moratorium is industry-led and lacks government oversight.
The lead author of the report, Jane Tiller, says today: "This is outstanding news for patients and the Australian public, and will safeguard the future of genomic medicine, precision health and medical research."
"This policy reform will provide certainty to consumers and allow Australians to make genetic testing decisions based on their health rather than fears of financial discrimination."
A 2017 paper from the Actuaries Institute found even a slight increase in the number of people undergoing genetic testing could have a significant impact on the cost of life insurance. It's estimated about 1.5 million Australians undertake genetic testing each year; in 2017 the number was closer to 700,000.
This article first appeared on Financial Standard
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