Case Study-Insurance

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ACCT 1085

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Philosophy

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Apr 3, 2024

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Case Study: Insurance and Genetically Inherited Diseases (B&D p.179) 1. Discuss the questions following the case study. Do you consider it to be unethical for insurance companies to charge high-risk people a higher premium than low-risk people? Arguments for Charging High-Risk Individuals Higher Premiums: 1. Utilitarianism :  Pros : Higher premiums for high-risk individuals maximize overall utility by ensuring that insurance remains affordable and accessible for most policyholders. It allows insurance companies to manage risk effectively, preventing financial instability and ensuring the sustainability of the insurance market.  Cons : Charging high premiums may create hardships for high-risk individuals, potentially leading to reduced access to healthcare and poorer health outcomes, which could undermine overall well-being. 2. Deontology :  Pros : Charging high premiums aligns with the principle of treating individuals as ends in themselves, as it allows insurance companies to fairly assess risk and set premiums accordingly, regardless of individual characteristics or preferences.  Cons : This approach may overlook the duty to prioritize the well-being of vulnerable individuals, potentially leading to discrimination against those with pre-existing conditions or genetic predispositions. 3. Justice & Fairness :  Pros : Charging higher premiums to high-risk individuals can be perceived as fair and just, as it ensures that individuals bear the costs associated with their own risk factors rather than shifting the burden onto low-risk individuals. It promotes fairness in pricing and prevents exploitation of the insurance system.  Cons : This approach may perpetuate social inequalities, as it places a disproportionate financial burden on high-risk individuals who may already face socioeconomic challenges, potentially exacerbating disparities in access to healthcare and insurance coverage. 4. Virtue Ethics :  Pros : From a virtue ethics perspective, charging high premiums demonstrates prudence and responsibility on the part of insurance companies, as they fulfill their duty to manage risk effectively and maintain financial stability. It also reflects integrity by transparently pricing policies based on actuarial principles.  Cons : This approach may lack compassion and empathy for high-risk individuals, failing to consider their unique circumstances and needs. It may prioritize financial considerations over the broader ethical obligation to ensure equitable access to healthcare and insurance. Arguments against Charging High-Risk Individuals Higher Premiums: 1. Utilitarianism :  Pros : Charging lower premiums to high-risk individuals may maximize overall utility by ensuring that everyone has equal access to essential healthcare services, regardless of their risk profile. It promotes the greatest happiness and well-being for the greatest number of people.  Cons : This approach may lead to adverse consequences such as increased financial strain on insurance companies, higher premiums for low-risk individuals, and potential market instability, ultimately reducing overall utility. 2. Deontology :

 Pros : Charging lower premiums aligns with the duty to prioritize the well-being of individuals, particularly those with pre-existing conditions or genetic predispositions, who may face barriers to accessing healthcare. It respects individuals' autonomy and dignity by not penalizing them for factors beyond their control.  Cons : This approach may overlook the duty to act fairly and transparently in setting premiums, potentially leading to exploitation of the insurance system and undermining the principle of equal treatment under the law. 3. Justice & Fairness :  Pros : Charging lower premiums promotes fairness and equality by ensuring that individuals are not unfairly penalized for factors beyond their control, such as genetic predispositions or pre-existing conditions. It prevents discrimination and promotes social justice in healthcare access.  Cons : This approach may create challenges in maintaining actuarial fairness and market stability, potentially leading to higher costs for low-risk individuals and market distortions that undermine the affordability and accessibility of insurance for everyone. 4. Virtue Ethics :  Pros : Charging lower premiums demonstrates compassion and empathy for high-risk individuals, reflecting a commitment to fairness, solidarity, and social responsibility. It prioritizes the ethical values of caring for the vulnerable and ensuring equitable access to essential services.  Cons : This approach may overlook the virtues of prudence and responsibility in managing risk effectively, potentially leading to financial challenges for insurance companies and compromising the sustainability of the insurance market in the long run. 2. Are insurance companies acting responsibly when they require customers to disclose medical information and/or submit to a medical examination? Insurance companies asking for medical information and exams can be seen as responsible from various ethical perspectives: 1. Utilitarianism : It's good because it helps keep insurance costs balanced for everyone. For instance, if insurers didn't collect this data, premiums might rise for everyone, making insurance unaffordable. 2. Deontology : It's fair because insurers have a duty to be honest and transparent. By gathering health data, they can set fair premiums and let customers make informed choices about their coverage. 3. Justice & Fairness : Requiring this information ensures fairness. It stops high-risk individuals from unfairly burdening low-risk ones with higher premiums. Without it, insurance could become unfair and discriminatory. 4. Virtue Ethics : It shows responsibility and integrity. Insurers need to manage risks well to protect everyone's interests. Being thorough in assessments reflects a commitment to fairness and transparency. Real-world examples:  Utilitarianism : In the Affordable Care Act in the US, requiring everyone to have health insurance helps spread costs evenly, keeping premiums lower for everyone.  Deontology : Companies like John Hancock offering discounts for healthy living habits. They encourage transparency about health and offer incentives for healthier lifestyles.  Justice & Fairness : The Genetic Information Nondiscrimination Act in the US protects people from discrimination based on genetic information, promoting fairness in insurance.  Virtue Ethics : Companies like Vitality in the UK promote healthy living through rewards and discounts, aligning with values of responsibility and integrity. 3. 3. Argue either in Favor of or opposed to 'Senator Cowan's proposed legislation.

Senator Cowan's proposed legislation to stop insurance discrimination based on genetic testing is a good idea because: 1. Fairness : Discriminating based on genetic tests is unfair. People shouldn't be punished for something they can't control. 2. Equal Access : The law ensures everyone can get insurance, no matter their genetic makeup. This helps everyone stay healthy and financially secure. 3. Encouraging Testing : People might get genetic tests more willingly if they know they won't face discrimination. This helps them make better health choices. 4. Fighting Stigma : Discrimination based on genetics can make people feel judged. The law helps fight this stigma and promotes a more caring society. 5. Global Support : Similar laws in other countries show that protecting against genetic discrimination is important worldwide. In short, Cowan's law promotes fairness, equality, and better healthcare for everyone. Discuss the legislation in Belgium, Denmark and Finland 1. Belgium : Belgium has laws prohibiting genetic discrimination in various areas, including insurance, employment, and healthcare. The Genetic Information Non- Discrimination Act (GINA) prohibits discrimination based on genetic information in these domains. This law ensures that individuals cannot be discriminated against or denied services based on their genetic predispositions to certain diseases. 2. Denmark : Denmark has implemented laws to protect individuals from genetic discrimination. The Act on Processing of Personal Data prohibits the processing of sensitive personal information, including genetic data, without the individual's consent. This legislation ensures that genetic information is treated confidentially and cannot be used to discriminate against individuals in areas such as insurance or employment. 3. Finland : Finland also has legislation in place to prevent genetic discrimination. The Genetic Information Act regulates the use of genetic information in healthcare, insurance, and employment. This law prohibits discrimination based on genetic factors and ensures that individuals have the right to privacy and confidentiality regarding their genetic information. 2. Contrast the ethical reasoning of utilitarianism and deontology with respect to this case. Explain which you believe is the right approach. Utilitarianism specifies a good, desired outcome. It aims to make decisions that benefit the majority of people and maximise good consequences over bad ones. Deontology is a theory that the morality of an action should be based on whether it is right or wrong under a set of rules, rather than based on the consequences of the action. Utilitarianism:

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 Focus on Consequences: Utilitarianism evaluates actions based on their outcomes and aims to achieve the greatest good for the greatest number of people.  Support for Legislation: From a utilitarian perspective, supporting legislation against genetic discrimination could be justified if it leads to overall happiness and well-being. By preventing discrimination, more people may feel secure in their genetic privacy and have better access to opportunities like insurance and employment.  Consideration of Benefits: Utilitarianism would consider the benefits of the legislation in terms of promoting social harmony, reducing stigma, and ensuring fairness in society. Deontology:  Focus on Duty and Principles: Deontology emphasizes moral duties and principles rather than consequences. Actions are judged based on whether they adhere to ethical rules or duties.  Rights-based Approach: Deontology might argue for legislation against genetic discrimination based on the principle of respecting individuals' rights to privacy and fair treatment. It prioritizes the inherent value and dignity of each person.  Consideration of Moral Rules: Deontology would focus on whether genetic discrimination violates fundamental moral rules or principles, regardless of its consequences. Which Approach is Right: Determining the "right" approach depends on one's ethical beliefs and values. Utilitarianism prioritizes outcomes and overall societal well-being, while deontology emphasizes moral duties and principles. In this case, both approaches could support legislation against genetic discrimination, albeit for different reasons. Utilitarianism may focus on the positive consequences for society, while deontology may stress the importance of respecting individual rights and moral principles. Ultimately, the choice between utilitarianism and deontology depends on which ethical framework resonates more with an individual's values and beliefs. Some may prioritize maximizing overall happiness and well- being (utilitarianism), while others may prioritize upholding moral duties and principles (deontology). Reference: https://www.scu.edu/ethics/ethics-resources/ethical-decision-making/lying/ #:~:text=Lies%20are%20morally%20wrong%2C%20then,their%20freedom%20to %20choose%20rationally .

Case Study-Insurance

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