Washington Insurance companies would be barred from using people's genetic information or family histories to deny medical coverage or set premiums under a bill passed 95-0 by the Senate on Tuesday.
Employers would also be prohibited from using such information in hiring and firing.
The measure, supporters said, would protect people who might be reluctant to undergo genetic testing for such diseases as breast cancer or Huntington's disease because they fear that information could be used against them.
"It simply isn't right that the very information which may lead to a healthier life and the prevention of a disease may also lead to the denial of health insurance, or higher rates," said Sen. Olympia Snowe, R-Maine, who has led a years-long effort to find a bipartisan consensus on the legislation.
The legislation, which has yet to move in the House, builds on a 1996 law that shields patient records from discriminatory use.
Advances in genetics have made it possible to determine a person's predisposition to some cancers, glaucoma, cystic fibrosis and heart attacks, but have also raised ethical concerns about how that information is used.
Snowe cited a case where 32 percent of the women offered genetic testing for breast cancer by the National Institutes of Health declined because of fears of health insurance discrimination.
The legislation bars use of genetic information in employment decisions, including hiring, firing, job assignments or promotions. It also prohibits a company from collecting genetic data from an employee or family member except in special cases, such as monitoring the biological effects of toxic material in the workplace.
Insurers may not collect genetic information prior to enrolling a person in a plan or use that information to deny coverage or set premium rates.