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Genetic Firing SquadSince a few years now broad genetic testing has been available to people in general. We are not talking about targeted genetic testing (i.e. to find out if you have a specific disease) but testing that attempts to find as many markers of conditions or prevalences or higher risks in your entire genetic code. A number of companies make such testing available for a reasonable cost and it would seem like a good idea. If you have a tendency to suffer from a specific condition it would be nice to be able to do something about it before it becomes real. So, why not?

Why not?

Because since a few years ago insurance companies are also demanding to know what you know about your genetic makeup. If you don't share this info with them, they will deny you a policy. And this ain't fair!

Isn't?

Well… not according to the many politicians and consumer-advocate groups getting on the trail of Genetic Fairness or Genetic Justice or Genetic something… And this is something that actually bother us a great deal (the Fairness, Justice or something thingy).

ARGUMENTS AND COUNTER ARGUMENTS

We have scoured comprehensively all arguments in favour as well as against this new trend and have produced a database of points of view to this regard. Then, we have contacted insurance representatives, ethicists, politicians, grass-root leaders and other interested parties and have even gone to the extreme of contracting our very own pollster in order to fully understand the issue.

Really?

Not a chance!

Why not?

For one, as we have stated many times, we are not rich. We work for a living; however, more importantly, there is no need as you will discover throughout this article. Let's doooooooooo it!

AND IN THIS CORNER, THE ARGUMENTS

You may have heard some of the following:

People with genetic information are being unfairly targeted because of their genetic risk profile.

Insurance companies are asking applicants to share with them existing genetic testing and/or any genetic information previously known, and this again, not fair.

These people suffer from genetic discrimination and this should be make illegal since all kinds of discrimination goes against society.

It is time that the government "do something" about this growing problem.

Voluntary efforts to prevent or diminish genetic discrimination are not appropriate or they are insufficient because in those circumstances there is an imbalance of power.

Capping life insurance payouts without genetic testing at a given sum of money is also discriminatory.

AND IN THIS CORNER, US

Let's begin by stating that insurance companies are, after all, companies! They operate (just like any other company) on self-interest. As such they are trying to get as much profit as possible as fast as possible. There is no secret here. However, what the vast majority of those do-good and well-intentioned but utterly disinformed people forget is that in so doing Insurance companies improve our standards of living.

Think about it.

By Insurance companies not going bankrupt, they… ghasp… provide insurance to many people! Through this insurance (particularly life) they help many families in their time of need. Because Insurance companies exist we can pass the risk of being severely ill or dying to other people, and we can do this for a modest cost. Without Insurance companies this would not be possible.

Think about it.

Insurance companies help the people in most need when they need it most! No government policy or program necessary!

Additionally, if we would go socialist or Islamic and demand that Insurance companies work not-for-profit just like banks, then we would have very few Insurance companies (as well as banks) and this would not cover people's needs! Why is it so? Because the vast majority of people starting Insurance companies do so out of self-interest. You remove this motivation and… well… there is no motivation to do it. No motivation no Insurance Companies. And who suffers in this scenario? You got it. People. People just like you or us.

Think about it.

The Insurance business is just like any other business and it is subject to the same free market rules. These rules are simple; you screw with customers you go broke. You do not screw with customers and then you must constantly improve your products and lower your prices just to be able to compete and stay in business. This is not a mystery (see for example We Don’t Need No Stinking Competition or Austrian Economics For Dummies - Competition). However, if governments get involved creating artificial conditions and rules, regulations, monopolies, and so on, the final result is always the same: stagnation and lousy products.

Look, this is not difficult.

The whole of the Insurance business operates on the idea that they have more money coming in as premiums than they have going out as payouts. This is not a revolutionary concept. In order for an entrepreneur to ascertain whether or not this is a profitable business, they must perform an economic calculation (see Austrian Economics For Dummies - Economic Calculation) which is nothing but a best guess they may come up with as to what a real free market will do. However, in order to perform this calculation, they must have some sort of information. Nobody in their right mind goes into a business without some sort of idea of what is going to happen. Let's be serious here, do you know anybody, anyone who started a business by simply spending money blindly in it? Without at least having a guess at what's going to happen? Of course not! Sure, their guesses may be waaaaaay off. That happens. More frequently than what you may believe. But that's not the point. The point is that economic calculation does happen and it is absolutely necessary.

In the same manner Insurance companies operate on economic calculations. The first Insurance companies were simply a bunch of maritime merchants polling money together to pay out to one of their members if a ship got destroyed or pirated. But even those people made economic calculations. They realized that it was cheaper, on average, to spend some money but be protected against bankruptcy. Similarly, in modern Insurance companies it is all about actuarial data; who dies and who lives, how often, which accidents, in which areas, under which weather conditions, and so on and on and on and on. If Insurance companies could not perform this calculation, then they would simply go broke. However, precisely because they can perform them, they don't go broke and thus they serve all of us.

Now, what would happen if by regulation all genetic information cannot be used by Insurance companies? Said companies would be deprived of critical information with which to perform their economic calculation. It would have exactly the same effect if we would decree that they may not use any statistical information regarding life expectancy. Even the notion of such limitation sounds ridiculous; yet, when we talk about genetic information the general point of view turns the other way!

Many people argued that Insurance companies are making enough money already and that depriving them from genetic information won't affect their bottom line in any meaningful manner. On the other hand, allowing them to use genetic information will create a situation where such companies will "abuse" this information by raising premiums for higher risk people! And this is, of course, evil, bad and thus such companies must be punished. But the reality is that if you think it the other way around, it is zero-sum game. This is so because for people without genetic predispositions or lower risk their premiums will go down. Why so? Because of competition for one but also because Insurance companies would want to have as many as those people in the books because their chances of getting ill or die will be lower. Thus, they will make such insurance policies more attractive by lowering premiums. With this more stable income stream, Insurance companies will now be able to fund more reliably people at higher risk. Not only that. People with known genetic predispositions will have a strong incentive to take good care of themselves because of the increased premiums. In so doing, they will reduce the "burden" on "society" (for those of you that are still thinking the socialist way). It is quite funny that when Green political parties throughout the world demand an artificial rising in costs for energetics to decrease pollution, a great deal of people agree. However, when the exact same argument is presented in terms of health, then it suddenly becomes "unfair"!!!

But let's go a step further. Let's assume that we are mistaken and with the genetic information Insurance companies will be able to make more money. Terrible, isn't it? Well…no. What do you think that they will do with all that extra money? Burry it in the backyard? Of course not. Don't be ridiculous! They, just like anybody else, will invest that money in… the free market… which with this new injection of capital will produce more and better products that will make our lives easier!

And what about those people who cannot afford an expensive Insurance policy due to their genetic predisposition? Simple, again, you are looking at a problem from a status-quo / socialist point of view. What happens with those people in a free market? Eventually they will be able to get an insurance policy (albeit one more expensive) from a different Insurance company. Why? Because companies must be working hard to capture new clients all the time or go broke. Thus, new, innovative plans will become available. Eventually, all those people will have insurance. However, if we kill the free market, then for sure they will have insurance, but at what cost? At the cost of the Insurance companies' profits which will impact the capital markets and will decrease economic activity.

Really?

Yes, really.

But isn't this peanuts money when compared against the totality of the market?

Sure is. But you have to ask yourself what happens when millions of peanuts are destroyed by government action and as such they don't end up in the market anymore? Then, we are not talking about peanuts any longer. It isn't that lowering the profits of Insurance companies will bring an economic debacle; it's that lowering the profits of everybody does. And Insurance companies are no exception.

Then, we have to consider one more item with regards to profits.

Part of those new profits that Insurance companies may get will end up funding new better and cheaper medical treatments… treatments that will cure those genetic predispositions we talked about and thus making the whole thing a point moot!!! Nice, eh?

But why would Insurance companies fund medical research that will decrease their bottom line? Because it won't. Because that medical research will produce profits above their investments and it is thus a good business. Again, self-interest helping people though… self-interest!

And how do we know that this is accurate? Because there are studies showing that until governments got into the whole "socialized medicine" business, the medical profession was also subjected to the laws of the free market, which meant that treatments were getting cheaper and better all the time!

OK. Enough about profits; what about the "imbalance" of power thingy?

Don't be ridiculous. The entire market is an imbalance of power looking for a balance. The whole concept of an economic transaction is based on what's called "price discovery". This means parties getting together and discovering at which price an agreement looks like a win-win. At that point, a deal is struck. But wouldn't be people left outside the system? Yes. Sure. In the beginning. However, eventually, they won't as we already explained. Look, this is not a mysterious concept. Governments look forward and plan and screw-up. Free markets work right on the edge of tomorrow and deliver solutions just-in-time. The key difference is that the former fails but delivers (crap) today. The latter succeeds but delivers (the goods) tomorrow. Which one do you prefer? More of this in an upcoming article.

And what about the reverse "imbalance" of power once anti-genetic-discrimination laws are approved? Huh? Sure. Let's say that you have a lethal genetic disease and you know it because you got tested. What is going to stop you from loading up on many, many life insurance policies and thus stiffing the companies when you die? Huh? Who is going to deal with that "imbalance" of power? What? That it won't have any effect? How do you know? As people are driven by self-interest, they sure will do so! Wouldn't you? Wouldn't you want your loved ones to get as much money as possible once you croak? Of course you would! Anybody would!

CONCLUSION

The whole idea of preventing Insurance companies from using genetic information is laughable and ridiculous… that's why it will be promptly enacted in law and trespassers will be persecuted and prosecuted… for the good of humanity… you know… one insurance policy at the time. We know that this will happen because it is already happening. Don't believe us? Just check what your brain-dead "representatives" are up to lately. You will be surprised.

And so, you have a choice. You can get tested, prepare yourself and take good care of your body, and thus minimize your need for insurance and, at the same time, make your life longer and better.

Or, you can go with "Plan B" from the government and keep destroying your body happy in the knowledge that the suckers… errr… Insurance companies will pay for the damage. Even if you croak tomorrow in dire agony. Yeah… That sounds like an excellent idea!

And there you have it. Personal responsibility versus passing the problem to the "other" suckers. Your choice.

We? We prefer self-interest. It works every time.

You? You may chose something different… just one thing… don't expect us to pay for your funeral. Not interested at all. Because fair is fair.

Note: please see the Glossary if you are unfamiliar with certain words.

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