To charge higher rates, or reject applicants, insurance companies rely on the Medical Information Bureau Inc. (MIB) to divulge personal information about health status and pre-existing conditions. According to an AHIP press release (2007),
The Medical Information Bureau Inc. (MIB) is a cooperative data exchange formed by the North American insurance industry more than 100 years ago. Today, the MIB operates the most extensive database of medical information on individuals who have previously applied for health, life, disability income, critical illness and long-term care insurance.
Not all of the information collected by the MIB is medical; some MIB report codes indicate previous criminal activity or evidence of a dangerous lifestyle, including, "adverse driving records, hazardous sports, aviation activity, or homosexual behavior." In 1995, the Federal Trade Commission ordered the MIB to comply with the Fair Credit Reporting Act (FCRA) and provide annual disclosure of medical report files to consumers.
Essentially, the Medical Information Bureau Inc. (MIB) helps make sure that if one life insurance company rejects a person on medical grounds, then other life insurance companies will be made aware of the ailment and reject that person. MIB is thus the official insurance agency gossip columnist.
Never heard of The Medical Information Bureau Inc. (MIB)? Here is what Meg Brown, Chief Underwriter for American Republic and World Insurance says about the MIB information service,
"We already have an admirably low rescission rate, and we think MIB will allow us to improve performance even further. Frankly, as use of MIB becomes more widespread among health insurers, we want to be sure we have access to the same data our competitors have."
The sales of personal medical information are indeed rising, says Douglas M. Mertz, Vice President for MIB Solutions Inc.,
"Companies and health plans selling individual medical expense insurance are increasingly seeking new tools to give them a better understanding of their applicants’ medical profiles up front. Information provided by the MIB is the fastest, most cost-effective way to help determine if medical statements on applications are accurate and complete."
According to the Federal Trade Commission press release, MIB member corporations account for 99 percent of the individual life insurance policies and 80 percent of all health and disability policies issued in the United States and Canada. Thus, "medical reports" sold to insurers by the Medical Information bureau are like credit reports for your health. The Washington Post reported that these insurance industry databases contain file records on more than 200 million Americans.
In fact, just as Experian, Equifax, and TransUnion, keep "credit reports" for all consumers, and are required to provide annual credit reports, there are actually three insurance reporting agencies that collect and sell medical reports. In addition to the MIB, the Federal Trade Commission has identified Ingenix, Inc. (a Division of UnitedHealthcare Inc.) and Milliman, Inc. as nationwide specialty consumer reporting agencies under the Fair Credit Reporting Act (FCRA). From the FTC complaint against Ingenix, Inc.,
"the medical profile generated by Ingenix Inc.'s MedPoint product includes, but is not limited to, prescription drugs, including dosage and number of refills filled by the insurance applicant for the previous five years. It also includes for each drug, the name and address of the dispensing pharmacy, as well as the name and address of the prescribing doctor, including specialty medical practice."
Based on the information in your personal medical report file, insurance companies can reject your application, charge you higher prices, or cancel your existing policy. For example, a BusinessWeek report reveals that filling certain prescriptions can hurt your chances of affordable health insurance in the future. At the very least, consumers should be aware that medical reports, sold to insurers by the MIB, Ingenix, Inc., and Milliman, Inc. enable health and life insurance corporations to charge higher premiums and rescind coverage.
Checking your medical report for errors and accuracy is the simplest way to reduce out-of-pocket costs for insurance. And, for any person who thinks they may have a "pre-existing condition" that could cost them more or exclude them from coverage, checking their medical report disclosure file is essential before appling for insurance.