Insurers Using your Prescription History to Deny you Health Insurance
The Prescription Access Litigation Blog has been on summer vacation recently, sunning itself at the beach, drinking iced tea, and playing volleyball with other blogs at Blog Camp. It’s now back, tanned, rested, and ready to deliver an ice-cold cup of refreshing pharmaceutical news and outrage to you, our thirsty readers.
And its first post-summer-break item is a dispatch straight from the Department of Unbelievably Evil & Greedy Schemes:
Business Week ran a special report yesterday (July 23, 2008), with the frightening title:
“They Know What’s in Your Medicine Cabinet: How insurance companies dig up applicants’ prescriptions—and use them to deny coverage”.
Here’s the rub:
That prescription you just picked up at the drugstore could hurt your chances of getting health insurance.
An untold number of people have been rejected for medical coverage for a reason they never could have guessed: Insurance companies are using huge, commercially available prescription databases to screen out applicants based on their drug purchases.
This is one of the latest revelations concerning the practice of pharmaceutical datamining. There’s a fact that few people know, but that should be printed on huge signs at every pharmacy:
Pharmacies sell information about the prescriptions they fill to companies that then sell that information to health plans, pharmaceutical companies and others that use it for marketing purposes.
The use of this information that’s most widely known is for drug company marketing. Companies like IMS Health and Verispan buy data from pharmacies detailing the prescribing records of doctors. That data is supposed to have any details about individual patients removed, or “scrubbed.” These companies then turn around and sell this information to drug companies. The drug companies give this information to the sales people, who then descend on doctors’ offices, armed with the details of exactly what drugs the doctor has prescribed, and how that’s changed over time. They can then tailor their pitch accordingly.
That practice is bad enough, and a number of states have passed or are trying to pass laws outlawing this “datamining.” (And datamining companies have sued to block these laws in every state in which they’ve been passed — we at PAL joined a “friend of the Court” brief defending Maine’s law. Read more about that here.) It’s an issue that the Prescription Project and the National Legislative Association on Prescription Drug Prices are working very hard on.
But, as the Business Week report describes, an even more nefarious use of this prescribing data is emerging. A few choice excerpts and factoids from that article:
- “Traditionally, applicants have been asked to provide insurers with a description of past illnesses. About 30% are deemed uninsurable because of their histories, according to industry veterans. Prescription profiles could add another hurdle, making it especially difficult for the 47 million Americans who lack insurance to acquire coverage.”
- “Most consumers and even many insurance agents are unaware that Humana, UnitedHealth Group , Aetna (AET), Blue Cross plans, and other insurance giants have ready access to applicants’ prescription histories. These online reports, available in seconds from a pair of little-known intermediary companies at a cost of only about $15 per search, typically include voluminous information going back five years on dosage, refills, and possible medical conditions. The reports also provide a numerical score predicting what a person may cost an insurer in the future.”
- “drugs for depression and other mental health conditions are often red flags to insurers.”
It’s likely that other classes of drugs are red flags as well — anything that suggests a “preexisting condition,” particularly a serious or chronic one, might make an insurer lean towards denying a consumer coverage. So drugs for diabetes, arthritis, HIV/AIDS and any number of conditions might raise similar flags.
What’s particularly troubling about this is that, because of the nature of prescription drugs, there’s no way for consumers to be “anonymous” in the way that they can be in virtually every other product they buy. For instance, let’s say you go to the drug store to buy something that you’d rather not call attention to – be it diarrhea medication, contraceptives, or the latest issue of Us Weekly. You just pay cash and don’t use your store “frequent buyers card” (like the CVS ExtraCare card). Voila – anonymity.
But you can’t do that with a prescription drug. You need a prescription from your doctor, which identifies you, and your information gets entered into the pharmacy’s computer system. What’s ironic about this is that one can argue that there’s a greater interest in having your prescriptions kept private than in having your other purchases kept private.
How can pharmacies disclose my prescription information? Isn’t it private? This data is private, and is protected from disclosure by HIPAA, the Health Insurance Portability & Accountability Act. UNLESS you give someone PERMISSION to access that information. And that’s exactly what millions of consumers are doing, without realizing it, when they apply for health insurance. As Business Week says:
When applying for insurance, individuals routinely sign paperwork allowing providers to review their medical history. To comply with the privacy provisions of the federal Health Insurance Portability & Accountability Act, most insurers have now added a reference to prescription history in the lengthy fine print consumers are instructed to read.
The FTC forced the industry to begin disclosing the use of prescription information under a different federal statute, the Fair Credit Reporting Act. Insurers now are required to tell applicants the address of the company that assembled the data. Copies of prescription reports are supposed to be available to consumers at no charge under federal law.
But these disclosures are typically buried and never read by the overwhelmingly majority of consumers that are “agreeing” to them by signing that health insurance application. And there’s likely nothing you can do about it either — if you refuse to allow the health insurer access to your medical records, in all likelihood, they can and probably will just turn down your application. I believe that’s what they call a Catch-22, or perhaps being caught between a rock and a hard place.
Now that the practice is coming to light, hopefully privacy advocates and those working to make insurance easier to access will begin raising a hue and cry about this, and get the attention of legislators and regulators. In the meantime, it cant hurt to read the fine print when you apply for health insurance and ask your pharmacy what they do with your prescription records and whether it’s possible for you to “opt out” of whatever programs they have that sell that information.