Thanks Graham. One of my pet topics.

The mathematics of insurance have always fascinated me. People put money into a pot, some of it is extracted in the form of sales commissions, management fees, administration costs and the like, and the remaining amount is divided out between people who qualify for a payout.

So by definition, there will always be losers, i.e. people who put in but do not take out. These people are prepared to pay that price in exchange for some form of peace of mind.

But there is another dimension.

If you are in control of the pot of money, you need to hedge your bets sufficiently that you always pay out less than you take in. Like bookmakers, you adjust your rules to the volume of money coming in from a particular direction; if you are more likely to pay out on people with a genetic disposition to, say, heart attacks, you either restrict the number that you insure in that particular category, or you raise the price.

Problem is, if you increase the cost by too much, no-one will play your game. And if you prevent too many people with pre-dispositions, you will end up insuring people who don't need insurance. And it won't be long before they notice.

So it is going to be a balancing act for a good while yet.

Fortunately, it doesn't apply so much to our private health insurance system, which is "community rated". So everyone can play, genetically disadvantaged or not.

All
Personally I'm not convinced that base services non discretionary services should be in the hands of "for profit" organizations this includes Super and health insurance and no this isn't Communism/Socialism by stealth. I do believe some things are rightfully in the realm of Capitalism.

Pericles,
Your theory is right but in practice there are more low risk customers out there so insurance companies don't give a toss if they exclude least profitable (unwanted) categories.
Some car comprehensive insurance financially exclude young drivers in favour of the older more staid ones.

dear Sancho,
A little bit of personal experience of mine . In Feb 2006 I had a stroke and after seeing a doctor in the public health system, He told my friend that I would not last till morning. He wrote me off. As i was totaly incapasitated and could not even pee they kept me under observation and did nothing for me. I thank God for private health cover because in the public system I was assessed past treatment but even though it was the weekend when they were made aware of my mbf cover I was imediatly transfered to a private hospital where diogneses and treatment was started imediately The stroke is genitic and the specialist said I would have another and die. I thank God daily that the specialist does not have the final say for none of us know the hour of our death and doctors are only fallible like the rest of us . This old adage is still true today
"if you fail to plan you plan to fail". Don't leave your future in the hands of others or you may not like the outcome when it arrives.
In this nation the Government has taken the place of God as our provider and are doing a very poor job as managers. They can't even make it rain So they should stop trying to be our fairy God father and get back to basics.

Good topic.I've had similar thoughts.What access do the insurance companies have to our medical records via Dotors?Could Drs be paid secret commissions for access to our medical records?

The corporates want profits without the risk.They want perfect knowledge,but if the the punter at a roulette table or a card table has the ability to slant the odds in our favour by having a good memory,all bets are off.What is good for the goose is obiviously bad medicine for the gander.

It isn't necessarily access that matters, Arjay.

>>.What access do the insurance companies have to our medical records via Dotors?Could Drs be paid secret commissions for access to our medical records?<<

When you take out insurance of any kind (except private health insurance) there is that magic question on the proposal form, which asks whether there is anything else they should know, before they issue cover.

If you don't disclose, then claim, I think you'll find that it is at that point that they are allowed to investigate. If you have hidden anything, your claim is history.

This goes to the heart of Graham's question.

If your enquiry into your genetic makeup throws up a result where you are statistically more likely to have a heart attack, what can you do?

If you disclose, they will - understandably - up your life insurance premiums. If you don't, you leave behind a possibility that your beneficiary will be dudded.

But the sting in the tail might arrive if the insurance companies themselves ask for the tests to be performed - much as they ask for a medical checkup today. If you refuse to have the tests, they might not insure. If you do... see above.

You're damned if you do, and damned if you don't.

Pericles,
You are absolutely right it all comes down to "did you know" in other word your intention to defraud.

If insurance companies get the right to demand genetic tests then an argument can be mounted that insurance is betting on human life philosophically the ultimate blood sport wager?)or a financial way of (de)valuing a human life. In effect a person with a genetic flaw (a genetic propensity not always absolute) and their family's lives are less valuable than some one else. Yet in reality the contributive worth might be the other way.

As it's discretionary that's fine but Life companies precluding workers for super....that's wrong, wrong, wrong (period). Hence my concern over for profit super and health care.