Sounds fine in theory, but we're talking the insurance industry, here. We're talking about a business that practices legal discrimination every single day. If you don't believe me, try paying for auto insurance if you're a younger, unmarried male. You might have just as much driving experience and temperament as a married female of the same age, but she's gonna get a deal, and you'll get the shaft, based solely on demographics. The only thing they haven't figured out how to add into the equation is religion or race.
Malpractice insurance raises, the nursing shortage, and genetic science are on a collision course with the aging baby boomers. If you think its bad now in health care, it will be far worse in ten years if we don't come up with some solutions. If the Republican majority of 2007 cannot come up with some real answers, then they can expect to be unseated by Rats with radical ideas that will take hold in either 2009 or 2013, after the majorities swing their way.
AFAIK it's illegal. But the risk pooling of insurance doesn't need government regulation if we are willing to subsidize a high risk pool. Everybody else should be able to get a group rate based on their employment, union or professional association.
Adding genetic information would be less effective than adding other personal information such as whether you go to lots of parties. I totally agree that the insurance companies would like to add genetic garbage to their databases, but I maintain that it is not as effective as other personal data and won't be added just as the personal data is not.