Prescription history and costs for health insurance

When you apply for health or medical insurance, the insurer will use several judgments to determine how much they will charge you for your insurance.

Since, by law, insurers can no longer deny you coverage (with the passage of the Affordable Care Act), they have to instead make sure to pay for your care and then add it to the profits they expect to do, too. The total will include your health insurance premium.

Collection of medical data

To make these judgments, they will buy data from a variety of sources—data about you and your health that you may not have realized is being collected. This data includes your Health Information Administration report, your credit score, your prescription history, and your medication adherence score.

Most of us are unaware that anyone other than ourselves or our healthcare providers is keeping our prescription history. In fact, insurance companies and other companies can buy this history from both companies. Both the IntelliScript database (produced by a company called Milliman) and the MedPoint database (produced by a company called OPTUMInsight) track this data, which is then sold to health, disability, and life insurance companies.

Because this information relates to the health and care of individuals, both companies must comply with HIPAA laws. They cannot sell or share information without your permission. However, in order to apply for health insurance, you must obtain this permit.

READ ALSO:  How to avoid unnecessary medical tests

To collect this data in a form that can be sold to insurance companies, IntelliScript and MedPoint purchase information from Pharmacy Benefit Managers (PBMs). PBMs can range from your corner pharmacy (probably part of a larger chain) to large mail order pharmacies like Express Scripts or CVS Caremark. When you prescribe at any PBM, they are able to track who your doctor is (and what his or her expertise is), the medications and doses your healthcare provider prescribes for you for any reason, whether or not you’re prescribing it , and whether to refill.

From this data, they can draw some conclusions:

  • They can figure out what your diagnosis is, or at least an approximation, so whether you have (or have) an acute problem (that will go away) or a chronic problem (sometimes that recurs or haunts you for the rest of your life).
  • They can also tell how much your diagnosis affects you by the strength of your dose or how often your healthcare provider thinks you should be taking it. A serious problem probably won’t bother you anymore, so it won’t cost them much, if at all. But chronic problems, like diabetes or heart disease, or even just high blood pressure, can become very expensive over time. When they see an already serious chronic problem, this will be a clue to the underwriter that they need to project more costs to the company and raise your premium accordingly.
  • They can determine if you have comorbidities, which means if you have more than one thing. The combined cost of a medical problem is even higher than the cost of treating each problem individually. For example, treating both heart disease and cancer may be more expensive than treating one patient’s heart disease plus another patient’s cancer.
  • This data will reflect how often you fill your prescriptions and whether you are adhering to your prescriptions. This information is similar to that predicted by FICO’s Medication Adherence Score, which insurers can use for comparison. If you insist, of course, your drug prescriptions will have their predictable costs. But it might also tell them that, based on your diagnosis, you’re controlling the problem, so there are no unexpected larger costs in the short term.
  • The underwriter will also look to see if you have been taking pain medication for any period of time. If you needed them years ago, but haven’t been prescribed them recently, there is no additional cost. However, if you’re currently taking painkillers and the dose has increased in intensity or frequency, it’s going to be a red flag for underwriters who need to raise your premium costs. For example, they may try to assess whether you are abusing drugs. Or they might decide to charge you more because if you keep seeking pain treatment, it could lead to bigger problems and even more pain medication bills.

These companies may also draw other conclusions from your prescription history. Over time, as more information becomes available from other sources like loyalty rewards cards, underwriters will judge other aspects of how you live your life and price their premiums accordingly.

patient protection

Unfortunately, it makes no difference whether their conclusions and judgments are correct. Your cost will be based on these conclusions, no matter how wrong they are.

There is little that patients can do to protect themselves from this information other than to ensure that prescription history data is correct. Because it is used to determine your insurance costs, both IntelliScript and MedPoint are legally required to comply with the Fair Credit Reporting Act (FCRA). This means that, like your credit score, you can request a free copy of your pharmacy history report from these organizations once a year, or when you’re denied life or disability insurance.

Get your medical records

Well, if you’re buying health insurance, it makes sense that you get a copy of your medical records (all records, not just your medication history), look at them carefully, and correct any mistakes.