New Affordable Genome Sequencing – Will Health Insurers Pay For It?

The mapping of the human genome has created new opportunities for genetic tests to predict, prevent, and treat disease.  In 2001, the first draft of the human genome was published by the National Institutes of Health (NIH) at a cost of $2.3 billion. Since then, the cost of transcribing the human genome has dropped dramatically.

In fact, on January 10, 2012, Life Technologies Corporation announced their new Ion Proton™ Sequencer, designed to sequence the entire human genome in one day. Reuters (1/10/12, Begley) reports that the purchase price of the tabletop device is $149,000, and the computer chip and bio-chemicals necessary to sequence a complete human genome will cost only $1,000. According to Life Technology, existing sequencing instruments, with purchase prices ranging between $500,000 and $750,000, take weeks or even months to perform full genome sequencing at a cost of at least $5,000 per genome.

While the main customers for genetic sequencing devices will likely continue to be laboratories, these new affordable and faster devices may bring genetics to large medical practices or clinics.

Ongoing Fear of Genetic Discrimination

While most people are excited about the use of genetic information to improve their healthcare, many are concerned that genetic information may be used by insurers to deny, limit or cancel health insurance, and by employers to discriminate in the workplace. This fear of genetic testing has been somewhat alleviated by passage of the Genetic Information Nondiscrimination Act of 2008 (GINA). Under GINA, people are now protected from discrimination by health insurers and employers on the basis of DNA information.

It is important to note, however, that the discriminatory prohibitions in GINA do not apply to life, disability, and long-term care insurers.  This begs the question, will long-term care insurers deny coverage if genetic test results indicate a predisposition to say – Alzheimer’s disease? Will life insurers deny coverage or quote an astronomical premium if a genetic predisposition to heart disease or cancer is shown?  These questions serve to illustrate that the privacy and security of genetic information is still a real concern.

Will Health Insurers Provide Coverage?

Surprisingly, health insurers have already provided DNA sequencing coverage in some cases, usually involving cancer, rare genetic diseases, or children. In fact, according to Forbes (3/2/11, Herper), insurance companies have been paying for sequencing of single genes, such as breast cancer or rare genetic disease genes, for years. In addition, Forbes reports that, for the first time known, an undisclosed insurer has agreed to pay for the complete DNA sequencing for a patient at the Wisconsin Children’s Hospital.

The low cost of the Ion Proton™ Sequencer will likely lead to greater use by people who are not ill.  In fact, Reuters speculates that babies might be the first in line for complete genome sequencing, especially when the cost of complete genome sequencing drops below the combined cost of the individual tests necessary to screen for the 29 genetic diseases every state is presently required to test a newborn for.

CDC Standards for Testing and Clinical Practice Integration

To be fair to health insurers, further study of the economic benefit of genetic testing to predict, prevent and treat disease is probably needed.  According to the National Human Genome Research Institute (NHGRI), several government agencies are working towards the development of regulatory standards for genetic testing laboratories and comprehensive integration of genetic testing into routine medical care.

For example, the Centers for Disease Control (CDC) has an advisory group specifically focused on the Clinical Laboratory Improvement Amendments (CLIA) regulations (Genetic Testing Policy), and projects studying validation of genetic tests and the integration of genetic tests into clinical practice (Genetic Testing).

HHS Coverage and Reimbursement Recommendations

In addition, the HHS Secretary’s Advisory Committee on Genetics, Health, and Society (SACGHS) has issued a comprehensive coverage report summarizing the issues surrounding reimbursement for genetic tests. (Coverage and Reimbursement of Genetic Tests and Services). The SACGHS report recommends:

  • Standardization of coverage decisions using the best scientific evidence across public and private payers.
  • Encouraging private plans to make their own coverage determinations about genetic tests and services relative to the populations they serve.
  • A plan to evaluate new local coverage decisions to determine which should be adopted nationally and to what extent greater consistency in Medicare coverage policy can be achieved.
  • Predictive and predispositional genetic tests and their accompanying services that meet evidence standards should be covered under Medicare, even when there are no current signs, symptoms, or personal history of illness.
  • States should receive information about the existing evidence base and other supporting information about genetic tests and services to inform their Medicaid coverage decisions.
  • Payment rates should be revised by HHS to reflect the true cost of a genetic test.
  • The Secretary should identify an appropriate entity to determine which health professions are qualified to provide genetic counseling services, and of those determined to be qualified, which should be able to practice without physician supervision and, thereby, bill payers directly for their services.
  • HHS agencies should work collaboratively with federal, state, and private organizations to develop, catalog, and disseminate case studies and practice models that demonstrate the relevance of genetics and genomics.
  • Educational resources should be widely available through federal government Web sites and other appropriate public information mechanisms to inform decisions about genetic tests and services.

Additional Associated Cost Considerations

Even though the cost of complete human genome sequencing is down, will there be additional costs to insurers and patients associated with the use of the technology? Consider just two possibilities: (1) the cost of analyzing and explaining the sequencing may be more than the cost of the test; and (2) medical costs may actually escalate due to the use of preventive treatments occasioned by defensive medicine by physicians. Will insurers pick up these additional costs?

And how about coverage for the long-term psychological effects on individuals who acquire their personal genetic information (and dwell on it for years)? The questions just keep coming.