How Insurance Companies Predict When You’ll Die – Personal Finance Article

The article “How Insurance Companies Predict When You’ll Die” by Joel S. Winston was published on June 18, 2014 by Credit.com. The article also appeared on Yahoo Finance and MSN.com Money.

“How Insurance Companies Predict When You’ll Die”

Life insurance is arguably the most disturbing financial product a law-abiding citizen can buy. After all, life insurance is essentially an investment on your life that pays off only when you die.

If someone is buying a car, it would be normal for them to consider various features like vehicle safety and gas mileage. Comparatively speaking, someone shopping for life insurance must confront the fragility of his own existence. The mental calculus of this purchase is unnerving, “When am I going to die? What might be the cause of my death? And, how much is my life worth?”

On the other side of the negotiating table, the insurance company needs to calculate the probability of your death before it will invest in your life. However, insurers have smartly recognized that asking customers to help guess their own time and manner of death is an awkward way to sell insurance policies. As a courtesy, life insurance companies will predict your death for you. The professional Las Vegas oddsmakers who take bets for sports games call it “setting the spread.” Life insurance companies call the process “underwriting.”

Estimating Your Demise

Life insurers require massive amounts of information to profitably “underwrite” potential customers, thereby separating risky people (i.e., sick or likely to become sick) from desirable people (i.e., healthy and likely to remain healthy). To feed this insatiable appetite for intelligence, life insurers have built the most sophisticated software tools and deepest pools of consumer data on the planet.

Actually, life insurers have been pioneers in the field of big data and personal analytics for more than 100 years. The Medical Information Bureau Inc. (also known as MIB Inc. and MIB Group Inc.) was founded in 1902 and is America’s oldest and longest continuously operating credit reporting agency. Accessing 100 million records and growing weekly, the Medical Information Bureau (MIB) owns and monetizes, “North America’s largest database of medical conditions on insurance applicants. [Including] diagnosed medical conditions from attending physicians, lab test results, qualified physical exams, self-admitted medical conditions.”

The Federal Trade Commission (FTC) warns Americans that, in addition to medical conditions, data collected and reported by MIB may include an individual’s credit history, driving records, criminal activity, tobacco usage, drinking habits, participation in hazardous sports and “other” data. Under questioning by a Senate Banking Committee in the 1970s, MIB’s former executive director and general counsel Joseph C. Wilberding revealed that the “other” category in MIB files has included information on “sexual deviation” (i.e., homosexuality, effeminate behaviors, bachelorhood, HIV acquisition, and a woman’s questionable “moral character” for giving birth out of wedlock), drug addiction, alcoholism and such hazardous hobbies as auto racing and flying.

Jonathan W. Sager, MIB’s executive vice president, would not comment directly on Wilberding’s testimony. However, he said: “Let me assure you that MIB does not have codes for ‘homosexuality, effeminate behaviors, bachelorhood, HIV acquisition, and a woman’s questionable ‘moral character’ for giving birth out of wedlock.'” (more…)

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Download or Print a Free MIB Report Request Sample Form

The Fair Credit Reporting Act provides every consumer with the right to request a free annual medical report file disclosure from the Medical Information Bureau (MIB, Inc.) and it’s membership of 500 insurance companies.

Under consent agreements with the Federal Trade Commission in 1983 and 1995, “the MIB, Inc., and all insurance companies who are members of the MIB, will abide by the Fair Credit Reporting Act.”

To request a copy of your free MIB report, you should complete ONE of the following options:

Toll-Free Telephone – “Streamlined Request”

(1) Call the MIB, Inc. toll-free telephone number at 1-866-692-6901 to make your request. (Note – The MIB “Voice Cue” is available Monday – Friday, 6AM -12AM ET, closed on holidays. According to the MIB phone disclosure website, “MIB’s disclosure process requires you to provide your personal identification information to assist us in locating your MIB Consumer File, should one exist. The ID information you supply will be validated with other consumer reporting agencies.”  As an additional warning, please be aware that the MIB voicemail system records and retains your personal information and voice imprint. If you are suspected of fraud, MIB reserves the right to use this recording as evidence against you.)

Written Request by Mail

(2) Download or Print this free MIB disclosure request form (PDF link). Then mail the completed and signed form to “MIB, Inc. 50 Braintree Hill Park, Suite 400, Braintree, MA 02184” to make your request. (Note – MIB, Inc. has taken the position that the FCRA does not require it to comply with a consumers’ express written request for free annual disclosure of their MIB file. As a warning to consumers, MIB publicly states, “Because a consumer’s request for free annual disclosure is supposed to be submitted via the Streamlined Process [1-866-692-6901] only, MIB reserves the right to decline a consumer’s request for free annual disclosure that is made using this form [by mail]. In such an event, MIB may instruct the consumer to use MIB’s Streamlined Process [1-866-692-6901]. Alternatively, MIB may also process a consumer’s request for free annual disclosure using this form if the consumer declines to use MIB’s Streamlined Process, but agrees to pay the fee [$10.50] that is allowed by law.” It is has yet to be determined whether MIB’s refusal to honor the valid, written requests of consumers is legal or illegal under federal and state law.)

MIB.com Online Submission Form

(3) Complete and submit the MIB.com online request form located on the MIB website. (Note – When you submit your information online, it may be validated by an unnamed third-party consumer reporting agency. According to the MIB.com Website Privacy Policy for Consumer File Requests – “If you are visiting MIB’s website to request disclosure of your MIB Consumer File (if any) or to dispute its contents, MIB will collect personal information from you. This information will be securely collected and maintained by MIB and will be used solely to process your request. Specifically, the personal information that you provide to MIB will be used to verify your identity, to conduct an accurate search of MIB’s databases and to confirm that the search results (if any) actually relate to you.  MIB does not sell, share, transfer, lease or otherwise disclose the personal information that you provide to any third-parties, except that MIB will validate the information you provide with other consumer reporting agencies to confirm your identity.“)

Upon receipt and validation of your request, the Medical Information Bureau, Inc. must provide disclosure to you by postal mail within 15 business days. If MIB does not have a “consumer file” on you, the law requires MIB to provide a “no record” letter explaining that a record does not exist.

An “MIB consumer file” may include: (1) Any medical and personal information that MIB maintains in its database about you, if any, in the form of translated MIB codes; and (2) the name(s) of the MIB member insurance companies, if any, that: (A) reported information to MIB, along with the dates such information was reported; (B) received a copy of your MIB Consumer File during the three (3) year period preceding your request for disclosure and the dates the companies received your file; and, (C) made an inquiry to MIB about you within the past two (2) years, along with the dates of such inquiries.

Upon review of the contents of your MIB consumer file disclosure, if you believe that any information is incomplete or inaccurate, you should contact the MIB, Inc. directly to initiate a dispute. (The mailing address is “MIB, Inc. 50 Braintree Hill Park, Suite 400, Braintree, MA 02184”) If you identify information in your file that is incomplete or inaccurate, and report it to the Medical Information Bureau, Inc. (a specialty consumer reporting agency), the MIB must investigate your claim (unless the dispute is “frivolous”). See www.consumerfinance.gov/learnmore for an explanation of dispute procedures.

Inaccurate, incomplete, or unverifiable information must be removed or corrected, usually within 45 days. However, the Medical Information Bureau Inc. (a specialty consumer reporting agency), may continue to report information it has verified as accurate. For all types of consumer file information, the Medical Information Bureau Inc. (a specialty consumer reporting agency), may not report negative information that is more than seven years old.

As a nationwide specialty consumer reporting agency, MIB Inc. “must provide a toll-free number that is published in every telephone directory in which a number for the company appears, and is clearly and prominently posted on the company’s website. In addition, federal law requires the company to have clear and easy instructions for consumers to get these reports, and adequate staff in place or means to deal with consumers’ requests.” If the Medical Information Bureau Inc. (MIB), or any other specialty consumer reporting agency, violates the Fair Credit Reporting Act (FCRA) with respect to your inforamtion, you may be able to file a lawsuit seeking damages in state or federal court.

The Medical Information Bureau, Inc. (MIB), a Delaware corporation, is the world’s largest insurance reporting agency and represents approximately 500 member insurance companies.  “The Medical Information Bureau (a/k/a, MIB Group, Inc., a/k/a, MIB, Inc., a/k/a, MIB Solutions, Inc.) collects and furnishes information on consumers to all Medical Information Bureau (MIB) member corporations for use in the insurance underwriting process.”

In addition to an individual’s credit history, data collected by the Medical Information Bureau (MIB) may include “medical conditions, driving records, criminal activity, drug use, participation in hazardous sports, and personal or family genetic history, among other facts.”  Under Federal law, the Medical Information Bureau (MIB) is a “consumer-reporting agency” and is required by law to provide a medical report to consumers every 12 months.

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Medical Information Bureau (MIB Inc.) is Valuable Unit of the Insurance Industry

The Medical Information Bureau, Inc. (MIB, Inc.) is a nationwide specialty consumer reporting agency for health conditions and personal lifestyle data. The MIB consists of approximately 500 insurance company members.

According to the Federal Trade Commission, MIB’s member companies 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.

“MIB’s value to the insurance industry can hardly be overestimated. Not only to do some applicants forget to list ailments that could cost the insurer money but fraudulent applications are common.”

The Medical Information Bureau, Inc. (MIB, Inc.) also “plays a critical role in the lives of many thousands of individuals, affecting not only their security but their finances as well. But many of those affected have little idea that the MIB played a part. This is partly by design.” (Source, “Medical Bureau is Valuable Unit of Insurance Industry” published by The Associated Press (AP) on July 14, 1971). (more…)

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CVS Caremark To Penalize Employees Who Don’t Disclose Weight, Body Fat in Wellness Review

CVS Caremark Corporation has come under fire for asking employees covered under the company’s health care plan to disclose a range of personal information in a “wellness review” — from their weight to blood pressure — or face a financial penalty.  According to company statements, CVS is giving its 200,000 employees an ultimatum: submit your height, weight, body fat percentage (Body Mass Index, aka “BMI”), blood pressure, glucose levels, and other health indicators or suffer an on-going financial penalty of $50 per month.

Not only is CVS Caremark demanding that workers get “wellness reviews” under threat of financial penalty, CVS is also asking workers to give permission to the insurer to turn over that information to a firm that provides benefits support to CVS, the Boston Herald reports. CVS says it will pay for the weight, body fat and blood screenings. But in exchange, workers must sign a form saying the screening is voluntary, and that the insurer can give test results to WebMD Health Services Group (the firm provides health management programs and benefit support to CVS).

An internal CVS document leaked to the press warns that, “[Our CVS Caremark] Colleagues who take action to stay healthy or improve their health, and get results, will be rewarded. Those [CVS Caremark colleagues] who don’t take accountability will have to pay more in the future.” And although the CVS says the medical exams are completely voluntary, anyone who chooses not to weigh in will end up paying an extra $50 per month, or $600 a year more for benefits. And CVS employees don’t have a lot of time to decide what they’ll do; their screening results are due by May 1, 2013.

However, CVS Caremark is far from the only private or public employer one pushing workers to reveal detailed medical information. As health care costs tick up and employers rush to comply with new requirements tied to President Obama’s Affordable Care Act, many companies are asking their workers (and in some cases, workers’ spouses) to undergo rigorous health care screenings aimed at encouraging healthier living — and boosting the company’s bottom line.

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Denied Insurance Because of A Medical Coding Error in Her MIB Report – Video

Consumer Reports Health’s Cover America Tour realized the impact of the Medical Information Bureau (MIB) when they visited Sheila (above) in Gulfport, Miss., the day after her 50th birthday.

When she attempted to apply for health insurance, Sheila was surprised when she was rejected for an individual health insurance policy by three different companies. She was even more shocked when she learned why: Her record with MIB listed her as having a history of Chronic Obstructive Pulmonary Disease (COPD). Sheila does suffer from asthma, but COPD is supposed to be used to indicate more severe diseases of the lungs, such as emphysema or severe bronchitis. No company would insure her with this damaging mark on her record.

Sheila eventually traced the problem to a coding disparity at her doctor’s office. She says letters and phone calls to both her doctor and MIB have been to no avail, and the problem remains uncorrected on her record, effectively blocking her from obtaining individual health coverage. Unable to obtain health insurance coverage because of this medical coding error on her MIB report, Sheila has been forced to exhaust her 401(k) savings to pay out of pocket for healthcare costs.

Watch Sheila’s story and, before you apply for insurance or pay another monthly premium, make sure you request a copy of your medical report file from the Medical Information Bureau (MIB).

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Insurance Executives Cannot Do Business Without the MIB, Inc.

Medical report files, sold to insurers by the nationwide specialty consumer reporting agencies Medical Information Bureau, Inc. (MIB), Ingenix, Inc., and Milliman, Inc. enable health and life insurance corporations to charge higher premiums and deny coverage to policyholders.  Although consumers dislike these consumer reporting agencies, insurance corporations rely on such companies to provide them with your private data in order to execute underwriting decisions.

What do paid corporate subscribers say about the technology products and services the MIB, Inc. provides to it corporation membership? The MIB, Inc. marketing materials offer the following description:

WHAT MEMBER COMPANIES SAY ABOUT MIB

“I cannot do business without MIB –  it is an irreplaceable source of anti-selection criteria.” VP, Life Underwriting

“MIB always finds something that hasn’t been disclosed.” VP, Individual Medical Underwriting

“We save $58 for every dollar we spend on MIB.” Assistant VP, Underwriting (more…)

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America’s Largest Insurance Reporting Agency Upgrades to Web 2.0

The Medical Information Bureau Inc. (a/k/a, MIB, MIB Group Inc.) maintains a consumer “medical report” file for every consumer of life and health insurance.  The MIB Group Inc. provides its membership with a multi-million dollar computer infrastructure to instaneously access the personal information of insurance applicants and policyholders.

These are a few of the technology and web-based information products that the Medical Information Bureau (MIB) offers to its member insurance and health care corporations:

  • MIB Codes Portal: WEB 2.0” – In June 2008, the Medical Information Bureau (MIB) introduced a new, web-based version of the MIB Coding Manual that provides underwriters a user-friendly interface and effortless navigation.  More than just an electronic book, the “MIB Codes Portal” uses a WEB 2.0 approach that allows the Medical Information Bureau (MIB) to continually enhance the “portal” to offer underwriters easy access to information well beyond traditional coding reference information. (more…)
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The Washington Post Says Prescription Data is Used to Assess Consumers

The Washington Post reports that Milliman, Inc. and Ingenix Inc. compile individual “medical report” profiles on insurance consumers. Amid growing privacy concerns, the Washington Post calls these reports, “health “credit reports” drawn from databases containing prescription drug records on more than 200 million Americans.”

How does it this technology work?

“When an insurer makes an online query about an applicant, Ingenix or Milliman’s servers scour the data and within minutes or less return reports to a central server at the company. The server aggregates the information going back as far as five years, including the drugs and dosages prescribed, dates filled and refilled, the therapeutic class and the name and address of the prescribing doctor.”

Then comes the analysis. The MedPoint data tool, sold by Ingenix Inc., provides insurers a “pharmacy risk score,” or a number that represents an “expected risk” for a group of people. Of course, higher scores imply higher medical costs. Likewise, Milliman Inc.‘s IntelliScript codes pharmaceutical drugs for classification, according to the insurer’s instructions. So called “high-risk” codes could include AIDS cocktail drugs and cancer medications (both Ingenix and Milliman refuse to release their coding standards).

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Prescription Analytics: Corporate Databases Track What’s In Your Medicine Cabinet

Insurance Applicant and Policyholder Screening RescissionHealth and genetic information is regarded as the most private of information. People desire to keep their medical and health care records private for many reasons, including personal privacy, avoiding stigmas associated with certain diseases or conditions, and preventing job and economic discrimination.

When the New York Times reported on pharmacy marketing and advertising databases for sale, the Internet was generally outraged.  However, there seems to be less or concern (or a general unawareness), regarding the prescription analytics that corporations are now utilizing to construct massive medical and prescription databases.

According to a BusinessWeek Special Report from 2008, health care providers and insurers work with medical data brokers to compile records of your prescription activity.  Based on this data, insurers and health care providers charge consumers more for coverage, deny pay-outs, or rescind coverage altogether.

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Nobody Knows the Medical Information Bureau (MIB) (Secrecy and Privacy)

The Medical Information Bureau Inc. (MIB Inc.) (a/k/a, MIB Group, Inc., a/k/a, MIB, Inc., a/k/a, MIB Solutions, Inc.) has been the subject of ongoing controversy since the 1970’s, when its existence first became generally known. Even today, the Medical Information is an unknown entity; most consumers, doctors, and even politicians, remain unaware of its existence.

The Medical Information Bureau has a penchant for secrecy. For many years, insurance agencies consulted MIB without telling applicants about the files. MIB even had an unlisted phone number. Today, the secret continues, if to a lesser extent: MIB won’t publish its list of corporate members or release the list of codes it uses. More importantly, the MIB refuses to provide a centralized, secure, online source for consumers to request, review, and dispute their medical report files.

The following article, “Nobody Knows the MIB” by, Simson Garfinkel is excerpted from Database Nation: The Death of Privacy in the 21st Century (2000):

“… As part of his Ph.D. thesis at Harvard Business School on privacy policies in corporate America, Jeff Smith surveyed more than a thousand people on a variety of privacy issues, and conducted in-depth interviews with several dozen. One of the key questions he asked was whether people had ever heard of a company called the Medical Information Bureau (MIB). What he found wasn’t terribly surprising: they hadn’t… I asked my wife if she knew what the Medical Information Bureau was. She said she didn’t. (more…)

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Medical Information Bureau (MIB) Fact Sheet is Current (from 1990)

The Medical Information Bureau (a/k/a, MIB Group, Inc., a/k/a, MIB, Inc., a/k/a, MIB Solutions, Inc.) is the nation’s largest insurance reporting agency. Under Federal law, every consumer is entitled to a free annual copy of their medical report file.

MIB’s basic purpose was (and continues to be) to detect and deter fraud and misrepresentation in connection with the underwriting of life and health insurance and claims. MIB helps “keep the cost of insurance down for insurance companies and for consumers by preventing losses that would occur due to fraud or omissions,” says Neil Day, MIB’s president.

For many years, insurance agencies consulted MIB without telling applicants about the files. MIB even had an unlisted phone number. Today, the secret continues, if to a lesser extent: MIB won’t establish a secure website for consumers to request, review, and dispute their MIB medical reports.

In the past the Medical Information Bureau (MIB) reported codes in consumers’ files for such non-medical information as “sexual deviance” and “sloppy appearance.” MIB, Inc. President Neil Day disagrees, but since the Medical Information Bureau (MIB) won’t release the list of conditions for which it has created codes, there is really no way to know for sure. There have also been disagreements over the accuracy of MIB’s files.

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American Medical Students Association SCHOOLS the regular American Medical Association

In July 2007, protests at the American Medical Association (AMA) annual meeting in Chicago brought to the forefront the fact that the AMA has begun disclosing information in its Physician Masterfile, or physician database, to pharmaceutical companies. The American Medical Student Association (AMSA) are protesting the “sales” of these data for pharmaceutical marketing purposes.

In defense, the AMA calls the financial arrangement “licensure” and notes that physicians have the right to opt-out of sharing their personal information (although not its collection.) Likewise, the AMA opt-out options do not limit the AMA’s ability to store this medical data indefinitely into the future; physician information collected by the AMA is never deleted from the Masterfile, even after the physician’s death. Since the AMA began compiling physician data in 1906, the Masterfile is now more than a century old and includes approximately 900,000 physicians, about two thirds of whom are not AMA members.

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