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Medical Information Bureau opens to select health insurers

Select individual and small group health insurers now have access to medical information about more than 16 million people contained in files warehoused by the Medical Information Bureau (MIB).

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Consumer advocates

worry that

health insurers

may sign up for

MIB's services

so that they can

"cherry-pick"

applicants.

Many of the MIB's member life insurers that also offer health and disability insurance have long had access to the MIB's databases. Select companies that sell only health insurance can now belong to the organization and search through its information.

Like the life insurers, individual and small group health insurers can now pay a fee to become members of the MIB. They also pay a fee every time they request information from the MIB's databases. In return, member companies agree to report to the MIB any medical conditions that might be of interest to other insurance company underwriters.

Established in Boston in 1902, the MIB provides more than 600 insurers with medical information. According to the MIB, the databases serve as a repository of information that insurers use to compare notes on applicants — uncover those who have "lied" on their insurance applications — without having to contact one another directly.

For example, individuals with high blood pressure who want to buy a life insurance policy aare often aware that mentioning the medical condition means the insurer will either the application or charge a higher premium to issue coverage. An insurance company can check with the MIB to ensure the information provided on the application is accurate. If MIB files show the individual has high blood pressure, the insurer can dig deeper into the applicant's medical hisotry before deciding whether to issue a policy.

Fraud protection or cherry-picking?

The decision to open up the MIB's databases to select health insurers was simply an idea whose time had come, says Fred Pritikin, vice president and chief marketing officer of MIB's e-Services Corp.

"The information in our databases alerted life insurers to possible omissions or misrepresentations on the applications which require further investigations to make informed underwriting decisions," Pritikin says. "We realized that the same kind of service could benefit the health insurance industry as well."

But consumer advocates worry that health insurers may sign up for MIB's services so that they can "cherry-pick" applicants — meaning they approve the applications of healthy individuals while denying insurance to sicker applicants.

According to the MIB, an insurer is supposed to notify an applicant that it plans to check the MIB for the applicant's prior health history. However, consumer advocate Sue Blevins, president of the Institute for Health Freedom, a nonprofit Washington, D.C., think tank, is concerned that the notification may be buried in fine print.

"We've gotten so far removed from the purpose of insurance, which is to protect people from unforeseen catastrophies," says Blevins. "I would be concerned that the average consumer hasn't been fully informed that his or her medical information may wind up in these databases and that the information could later be used to deny him or her coverage."

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