The insurance penalties for taking life-saving genetic tests

Imagine you’re a 32-year-old woman whose mother has recently been diagnosed with breast cancer. Her doctors discover your mother carries a BRCA2 gene variant that dramatically increases your risk of breast and ovarian cancer.

Your doctor recommends you get a genetic test. If you carry the same variant, there are options: increased surveillance, earlier screening, and preventive surgery. This knowledge could allow you to take action years before disease develops, and may save your life.

But what happens if an insurer finds out? Could your premiums increase? Could cover be excluded? Could insurance become more expensive or difficult to obtain? How will it affect your children?

You, like many New Zealanders, have good reason to be concerned, and this is the result of a policy failure that is quite particular to New Zealand where we’re now an international outlier. Most OECD countries have introduced some form of protection governing insurers’ use of predictive genetic-test results. New Zealand hasn’t, placing it alongside Colombia and Costa Rica.

Genetic testing increasingly diagnoses rare disorders, guides cancer treatment, identifies inherited risk and enables preventive action before disease develops. In some cases it helps clinicians determine which medicines are most likely to work, and which treatments may be ineffective or cause unnecessary harm.

Yet insurers can still request the result, affecting the price or availability of cover, which can put people off getting tested; studies done in New Zealand and in the United States suggest that 10-30 percent of people may delay or decline clinical genetic testing or participation in genomic research because they’re worried about insurance consequences. 

The result is lost opportunities for prevention, delayed diagnoses, and family and relatives not learning about their inherited risks. It can prevent people getting life-saving healthcare, before they get diagnosed with a disease that might kill them.

We’re not suggesting insurers should ignore existing disease. If a person has been diagnosed with cancer, heart disease or another significant medical condition, that has long been relevant to underwriting decisions.

But a predictive genetic test identifies that a person has an increased risk of a disease. It doesn’t mean they have a disease. In many cases, people who have such information undertake surveillance, preventive treatment or risk-reducing surgery precisely because they want to lower that risk.

But for some New Zealanders, doing the right thing hasn’t protected them from insurance setbacks.

One woman we have worked with reported paying a 50 percent premium loading for about 15 years after learning she carried a BRCA2 variant, despite subsequently undergoing extensive risk-reducing surgery.

She eventually changed insurers and had the loading removed. Her daughter, who tested negative for the familial variant, was later quoted a 75 percent premium loading. Other individuals have described paying increased premiums while simultaneously having claims related to the relevant condition excluded from their policies. Some have undertaken preventive surgery and intensive surveillance while never developing the disease itself yet continue to face underwriting consequences linked to a predictive result.

What incentives are we creating? At present, a New Zealander who follows medical advice, gets tested and learns about an inherited health risk may face insurance consequences. Meanwhile, another person with the same genetic risk who decides not to be tested may continue to get insurance on standard terms, because neither they nor the insurer knows that risk.

This is deeply problematic. Our health system actively encourages prevention, early detection and informed decision-making, yet current insurance settings may discourage people from doing that.

We need to find a balance between fair underwriting and broader public-health objectives. We’re not alone in grappling with this issue, but we are increasingly alone in our failure to do anything about it.

Other countries have long recognised the challenge. Canada enacted the Genetic Non-Discrimination Act in 2017, and the United Kingdom has operated protections since 2001. Australia provides perhaps the most relevant comparison where, from October 2026 Australian life insurers will be prohibited from adversely using predictive genetic test results when underwriting life, trauma, disability and income-protection insurance.

These countries haven’t abandoned insurance markets. They’ve concluded that public confidence in genetic testing is important enough to justify specific safeguards.

Parliament anticipated this when it passed the Contracts of Insurance Act in 2024, creating a mechanism for regulating insurers’ use of genetic-test information after consultation. In doing so, it recognised that this is not merely an insurance matter but also a health, research and consumer-protection issue. Yet nearly two years later that consultation hasn’t begun.

Successive ministers have acknowledged the issue but have repeatedly cited “prioritisation” as the reason for delay. While consultation remains stalled, New Zealanders continue to face uncertainty about the insurance implications of undergoing genetic testing. Some will postpone testing, decline participation in research or avoid seeking information that could have significant implications for their health.

The costs of delay are borne by individuals, families and the public health system. Delay also undermines public confidence in the genomic and precision-medicine initiatives that New Zealand is investing in and encouraging people to use.

This contradiction is becoming increasingly difficult to justify. New Zealand is funding genome-sequencing programmes, expanding cancer genetics services and promoting precision healthcare as part of the future of medicine. At the same time, it has allowed a regulatory gap to remain in place that may discourage some people from accessing those very services.

Health professionals, researchers, patient organisations, legal experts and consumer advocates have been calling for progress for years, and increasingly, support has also emerged across party lines. The debate has reached the point where the question is no longer whether the subject warrants examination, but why that examination has not yet begun.

No one is asking ministers to decide today what the final New Zealand model should look like. There are legitimate questions about scope, implementation, and enforcement. That is precisely why consultation is needed. Consultation is where evidence is tested, competing interests are weighed and workable solutions are developed.

As genetic testing becomes an increasingly routine part of healthcare, public confidence will be essential to realising its benefits. A genetic test should be a tool for prevention, earlier diagnosis and better health outcomes. It should help people protect themselves and their families, not create a reason to avoid or delay potentially life-saving information.

The legal mechanism exists. The consultation framework exists. The consultation document exists. The international evidence exists. What is missing is the political decision to begin.