CEA Screening - Useful in Life & Health Underwriting?
Some insurers have added the carcinoembryonic antigen (CEA) blood test to the laboratory screening profile for Life and Health insurance applications, and some of our U.S. clients have asked for advice on whether to adopt this test. Every test has repercussions to consider, and CEA is an excellent example with both positives and negatives.
The rationale for CEA screening is simple: a good cancer-detection tool would strengthen underwriting. The only underwriting tool that detects cancer is PSA screening in men over 50. Because of underwriting’s limited ability to screen, cancer claims predominate in the first five years of insurance policies. The promise of a CEA test is that some cancers express CEA. One insurance laboratory’s research demonstrated that elevated CEA is associated with very high mortality among insurance applicants. Although CEA is expensive, our analysis of protective value clearly demonstrates practical break-even points.
End of story? No. For multiple reasons, we view CEA screening as a bad strategy. Let’s first consider the implications of screening tests and what happens to the applicant with an abnormal result.
Implications for Insurers
Every screening test immediately increases acquisition cost by the price of the test. The new test creates distinctions among otherwise identical (not tested) applicants. A test like CEA that identifies significant mortality risk results in a declined application. Those declines decrease premium revenue because fewer applicants qualify for an offer.
Higher cost with lower revenue is not an attractive business plan. Why screen at all?
The strongest argument for any screening is avoiding anti-selection. PSA is a good example of a valid screening test because many applicants know their PSA value, and we should know it, too. CEA is a much different proposition. Some people will anti-select because of known cancer or even vague concerns of ill health. You might catch them with CEA screening, but not very efficiently. Even in colon cancer, where the association with CEA is strongest, sensitivity is as low as 50%. That means half of patients who have colon cancer have a normal CEA value.1
Competitive practices can create an additional type of anti-selection. If competitors screen for CEA, the company without similar screening gets applicants they rejected. MIB should provide protection in lieu of matching the CEA screening strategy.
Finally, a motivation that many clients have cited for CEA screening is to reduce mortality. Despite the increase in cost and decrease in premium, CEA is capable of enough mortality reduction to yield a gain on the bottom line. Lower mortality works if you maintain constant premium and capture higher profit. If instead, you lower the base premium, you have declined some applications that used to make sales, taken the rest at a lower premium, and increased your acquisition cost. Can you then make enough new sales at your lower price to come out ahead?
Implications for Applicants
All tests create this dynamic for premium, costs and profit. CEA screening, however, generates a wholly different repercussion for your applicant, so potentially harmful that this alone militates against this test.
Consider the insurer’s message to the applicant declined for high CEA. Is it sufficient to advise a consultation with a doctor? Should that advice mention cancer? What will you offer regarding reconsideration? Consider also the liability and related negative press that the insurer might create for itself with such communications.
For example, the first comment from the applicant's physician would likely be that CEA is not an appropriate screening test and the insurance company shouldn’t have tested it. Then the doctor would explain that this could be cancer of the colon or elsewhere, or it could be meaningless. The only easy out is for the doctor to repeat the test with a normal result. That’s just a waste of time and money, plus serious loss of sleep for your client waiting on the result of the repeat test. Confirmation of the abnormal CEA is much worse. This will trigger an expensive, invasive and time-consuming series of investigations including colonoscopy and multiple imaging procedures.
The only good consequence for the insurer is the possibility of early detection and successful treatment of a potentially fatal disease. In this case, the client can credit the insurer for a lifesaving test. That is probably not the most common outcome. The worst-case scenario is what makes CEA screening unacceptable clinically and should deter insurers: after the workup, everything looks normal except the CEA. Now the message is that the client probably has a bad disease and the doctor can’t find it. Your client can only go home and worry until something develops, solely because of your underwriting requirement.
All insurance tests raise some features of this problem. Protective value studies or cost/benefit analyses mislead when the scope is too narrow. Be sure to examine all potential repercussions of a change in test strategy.