BACKGROUND: Genetic testing for disease predisposition is rapidly becoming available for a variety of chronic diseases, but it is not clear how the health insurance industry will make reimbursement decisions for these new diagnostics because the long-term clinical and economic benefits are unclear. A provider of dental health benefits requested assistance in assessing a genetic test for a composite interleukin-1 (IL-1) genotype. This test is being marketed to predict risk for progression of periodontal disease. OBJECTIVE: To estimate the incremental clinical and economic outcomes associated with the use of IL-1 testing to identify high-risk patients. METHODS: A disease simulation model was developed using decision-analytic and Markov modeling techniques over a 30-year time frame. RESULTS: In the base-case analysis, using the genetic test resulted in an incremental cost-effectiveness ratio was $32,633 per QALY gained. Sensitivity analysis produced results ranging from increased costs of $300,430 and 3.6 additional cases of severe periodontitis (per one thousand patients) to cost savings of $830,140 and 52.8 fewer cases of severe periodontitis. Sources of uncertainty were 1) patient compliance based on test result, 2) effectiveness of non-surgical therapy, and 3) the relative risk for progression based on genotype. CONCLUSION: The use of genetic testing to guide treatment for periodontitis may result in a wide range of outcomes under different modeling scenarios. These results range from improved patient health and cost-savings to additional costs and poorer health. Economic modeling has identified the additional data required to determine if IL-1 testing can be implemented in a primary care setting in a cost-effective manner. These methods may be used by the health insurance industry to assess the cost-effectiveness of genetic testing for predisposition towards other diseases.