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J Health Econ. 2019 Sep 30;68:102223. doi: 10.1016/j.jhealeco.2019.102223. [Epub ahead of print]

How is the trade-off between adverse selection and discrimination risk affected by genetic testing? Theory and experiment.

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University of Los Andes - Cede (Colombia) and Toulouse School of Economics, France. Electronic address:
Toulouse School of Economics, CNRS, University of Toulouse Capitole, Toulouse, France. Electronic address:
Universidad del Rosario, Bogota, Colombia. Electronic address:


We develop a theoretical analysis of two widely used regulations of genetic tests, Disclosure Duty and Consent Law, and we run an experiment in order to shed light on both the take-up rate of genetic testing and on the comparison of policyholders' welfare under the two regulations. Disclosure duty forces individuals to reveal their test results to insurers, exposing them to a discrimination risk. Consent Law allows them to hide any detrimental information, resulting in adverse selection. The experiment results in much lower genetic tests take-up rates with Disclosure Duty than with Consent Law, showing that subjects are very sensitive to the discrimination risk. Under Consent Law, take-up rates increase with the adverse selection intensity. A decrease in the test cost, and in adverse selection intensity, both make it more likely that Consent Law is preferred to Disclosure Duty.


Consent Law; Disclosure Duty; Personalized Medicine; Pooling health insurance contracts; Test take-up rate

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