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A different way of gathering underwriting information for life insurers could speed up the policy issue process, supporters say, but it is raising privacy concerns in some quarters.
Unknown to many Americans, there are databases maintained detailing their entire health record, including their prescription drug history. The availability of this information to third parties has created both opportunity for the insurance industry and concern for patient privacy.
When underwriting life insurance policies, carriers use a wide range of information to evaluate risks. This includes: information found on the application, motor vehicle reports, credit histories, attending physician statements (APS), and historical medical records.
E-Nable, a member of the MIB group, recently partnered up with Nex2, an aggregator of pharmaceutical benefit information, to include the applicant's prescription drug history as part of the information they provide insurers.
"The majority of impairments treated with prescription drugs can help build a medical profile of the applicant," says Mark Daley, chief operating officer of e-Nable.
Another provider of risk assessment information, LabOne, is also about to begin gathering prescription drug histories electronically. Their new product, called ScriptCheck, should be operational in about a month, says Greg Sadler, president of the insurance services division of LabOne.
"By checking all this information, insurers will bring the price of coverage more in line with the real risk. The healthy individual will not be subsidizing the one looking to defraud the company," Daley says.
However, some industry insiders feel that there is a real privacy issue here. People may not be comfortable with the fact that insurers will now have access to this information, one insider claims, and many people don't even realize this type of information is available.
"When individuals agree to participate in a company-sponsored health insurance plan, there are certain things you agree to," explains Daley. "The employer can share that information with third parties who administer claims. This is really claims data, because when a prescription gets filled, its a claim against the health insurance policy."
Daley agrees that privacy is a concern at e-Nable. "The applicant has agreed to privacy and confidentiality. It's our job to continue to keep the information confidential. Confidentiality is our obligation," he says.
Daley adds, "we are going to use this information for the right purpose, not for marketing."
At LabOne, Sadler states on its privacy policy, "we have a requirement that LabOne, prescription benefit managers, and insurance companies must follow all the laws and regulations regarding privacy–as with any of the confidential information we handle–and as well have the consent of the applicant."
Daley notes that companies will have to change their application disclosure to include specific reference to prescription drug history.
