-----BEGIN PGP SIGNED MESSAGE----- [ To: Cypherpunks ## Date: 11/01/97 ## Subject: Protocols for Insurance to Maintain Privacy ]
Date: Wed, 29 Oct 1997 09:24:39 -0700 From: Tim May <tcmay@got.net> Subject: Protocols for Insurance to Maintain Privacy
There are interesting protocols which can be used to skirt statist laws about insurance. A la carte insurance, for specific illnesses, is one of the best examples. Thus, a heterosexual male who doesn't use IV needles can "opt out" of coverage for AIDS-related treatments, thus transferring the effective cost to those most worthy.
I can see practical problems with this (like finding out that the fine print on page 248 of my insurance contract turns out not to cover dog bites that occur on Thursdays), but it's really just letting customers buy only what they want.
This has similarities to crypto protocols. And anonymity. To wit, it is possible to arrange anonymous blood tests for various conditions. So, Alice arranges a distributed set of such tests, perhaps at multiple labs. When she finds she has no preconditions or precursors for Diseases A, B, C, and D, she opts out of being covered for these diseases.
One problem with this is that, if it becomes widespread, nobody will ever buy insurance for these diseases unless they have it or probably will get it. This kind-of defeats the point of having insurance, which is to protect yourself from low probability high cost things happening. That is, before I've taken the test for genetic disease X, my best estimate of the probability that I will test positive is very low. Once I have taken it, I know the result. If I sign up for a-la-carte insurance for this disease, the insurance company effectively knows I must have tested positive for a predisposition to it, and so either won't give me insurance, or will give me insurance only at an extremely high rate (corresponding to a 1/10 chance of getting the disease, rather than a 1/1,000,000 chance). On the other hand, information isn't free--I have to spend some money for each of the hundreds of genetic tests available. There may be a profitable business in providing a battery of genetic tests for a large up-front fee, in a sort-of inverse-lottery scheme--if you get unlucky enough to have one or more of these disease precursors, we pay your insurance costs, or at least give you a big bundle of money to spend as you will. This is subject to various kinds of abuse (if you know you're predisposed to get some disease, you have a strong incentive to enter the ``lottery''), but it still might work.
--Tim May
--John Kelsey, Counterpane Systems, kelsey@counterpane.com PGP 2.6 fingerprint = 4FE2 F421 100F BB0A 03D1 FE06 A435 7E36 -----BEGIN PGP SIGNATURE----- Version: 2.6.2 iQCVAwUBNF1ZdEHx57Ag8goBAQFZsQQA7NGzgc39WbyB8eACZN71wrBwOdapExNn fvn1aEFeHoLWZnHIcLHwzSuCiJ22I9kGK8Co88fDfjDebb+kzHj9oO4xpfMecHLr pjvKWfEDOnv5th6hxCmzKrA6OpuMqYgtvX9USRuO1oLckjX4mTc6jvEp6ZBD96vB uWvXhj1bPUM= =Vc/C -----END PGP SIGNATURE----- --John Kelsey, Counterpane Systems, kelsey@counterpane.com PGP 2.6 fingerprint = 4FE2 F421 100F BB0A 03D1 FE06 A435 7E36