Genetic Health Risks: The Case for Universal Public Health Insurance

Abstract

This paper examines the role of the public sector in providing genetic insurance and health care when health risks are genetically determined at conception. We characterize the ex ante efficient outcome (where individuals are placed behind the veil of ignorance), and demonstrate that this outcome cannot be achieved by private health insurance markets or by a government which cannot commit to a once-and for-all transfer policy. In contrast, the desired outcome can be attained through public provision of universal health (genetic) insurance and of genetic testing, coupled with a public pension scheme.