A few months ago, Bob Vineyard, my co-blogger at InsureBlog, wrote about medical identity theft (MIDT). He referred to a Reader’s Digest article that characterized MIDT as “a Visa card with a $1 million spending limit.”
Health insurance is simply a mechanism for spreading the cost of health care among a larger group of people (“insureds”). Leaving aside the issues of risk and probability, insurance enables us to afford more expensive treatments, much as a mortgage helps us afford a larger home. In that regard, it is much like a credit card, in that we aren’t expected to come up with, say, $10,000 for an operation. Rather, we pay part of the cost, and the insurance company pays the balance. Most plans have maximum limits of millions of dollars; theoretically, this is akin to having a multi-million dollar line of credit.
If an unscrupulous person were to gain access to one’s insurance policy (via an ID card, for example), that person could rack up untold medical charges on our behalf. That costs us in a number of ways: increased rates, inaccurate medical records, etc. And it can affect our own credit scores, as well, because the provider is going to come after us, and it will be our responsibility to prove that we weren’t the ones who were treated.
The issue of MIDT is not just about personal finances, though: since the criminal used our insurance information to obtain services for his (or her) medical condition, our “medical history and health care records can include someone else's information.” This could be a fatal mistake; what if, because of such a theft, you got the wrong blood type during an operation?
According to the World Privacy Forum "(m)edical identity theft occurs when someone uses a person's name and sometimes other parts of their identity...to obtain medical services or goods...[and] frequently results in erroneous entries being put into existing medical records."
This is potentially catastrophic: if your medical records show that you had, say, open heart surgery last year, what happens when you apply for that new insurance policy (life or health, or even long term care)? Well, red flags are going to go up, and the underwriting process is going to screech to a halt. It will be up to you to convince the underwriter that your heart is just fine, and that you never had such a procedure. At the least, this will add to the time it takes to get that new plan; at worst, you may not be able to obtain needed coverage at all.
Because recent legislation requires providers to transition from paper-based record keeping to EMR (Electronic Medical Records), there is concern that the situation will likely get worse. The Privacy Forum warns that MIDT “is the least studied and most poorly documented of the cluster of identity theft crimes. It is also the most difficult to fix after the fact, because victims have limited rights and recourses.”
So what can you do? Not much: unlike those ads on TV that urge you to check your credit score, it’s not so easy to check your “medical score.” You can contact the Medical Information Bureau (a service that insurance companies use to check up on new applicants) and request a copy of your MIB record. And you can write your congresscritter, asking them to be aware of this growing phenomenon.
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Henry Stern, LUTCF is an independent insurance agent in Dayton, OH. A licensed Continuing Education instructor for Ohio and Kentucky, he has well over 20 years of experience in “the biz.” He blogs every day (or so it seems) at InsureBlog.