THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Monday, July 17, 1995 TAG: 9507150269
SECTION: BUSINESS WEEKLY PAGE: 22 EDITION: FINAL
SOURCE: BY PAMELA YIP, HOUSTON CHRONICLE
LENGTH: Long : 121 lines
When you visit your doctor, you trust that the information you provide will be confidential.
But when you apply for individual health, disability or life insurance, what you tell your doctor may boomerang back to bite hit you.
That's because when you apply, you give an insurance company permission to check out your medical history.
They get to look up that information from MIB Inc. in Westwood, Mass. MIB stands for ``Medical Information Bureau,'' and it's in the business of providing information to insurance companies.
When you apply for health, life or disability insurance, the personal information you provide to an insurance company may be sent to the bureau and stored in a data base.
That means that the next time you apply for insurance, and give an insurer permission, it can tap the bureau to see whether you've had or have a serious disease that would make you a greater risk.
Most people know about credit bureaus, but most probably have never heard of the medical bureau. You need to know because you may be denied insurance or be charged a higher premium based on the information.
The Federal Trade Commission wants to make sure you know what the medical bureau is saying about you.
Starting Oct. 2, if an insurance company denies you health, life or disability insurance, or raises your insurance premium based on a bureau report, the insurer must tell you where it got the information.
The carrier must provide the name and address of the consumer reporting agency that provided the report. In most cases it'll be the bureau, which is the largest insurance reporting agency.
Once you're notified, you're entitled to get a free copy of the report from the bureau if you request it within 30 days. Then you can check whether the information on the report was accurate.
This will be the first time that the bureau will provide consumers applying for health, disability and life insurance with the same guarantees that protect consumers from unfair treatment in credit and employment investigations under the federal Fair Credit Reporting Act, FTC officials said.
You've always had the right to get a copy of your MIB report, but you probably haven't done so because no one told you an MIB report played a part in your being denied insurance or having to pay a higher rate.
Bureau officials believed that because insurers are prohibited from using the report to decide whether to accept or reject an applicant without further research, the bureau didn't have to comply with the credit reporting law.
``MIB reports are not decisional material,'' said Neil Day, MIB president. ``Actual decisions are made on the basis of further investigation.''
But the FTC disagreed. ``Our view is that if an MIB report triggers an investigation that results in a denial, then you have to make that disclosure, that the MIB report played a role in the denial,'' said David Medine, FTC associate director for credit practices.
MIB officials made the rule change after the FTC contacted them. ``It's 1995 and the FTC has raised this issue every five years, and we really wish to not have to consider the issue again,'' Day said.
``That was a major factor in agreeing to send a notice in those cases where the MIB did act as an alert as the need for further investigation.''
It's about time, FTC officials said. ``In an area as important and personal as insurance, it is essential that consumers feel they are being treated fairly,'' said Jodie Bernstein, director of the FTC's consumer protection bureau.
``Consumers will now be told of the role that MIB reports have played in the denial or rating of insurance and will be able to exercise the self-help remedies afforded by the Fair Credit Reporting Act.''
The bureau said it doesn't have a report on most people who apply for individual insurance. A report is created only if you have a condition that seriously affects how long you'll live, bureau literature said.
But if an MIB report has wrong information on you, ``it might not even be your illness,'' said J. Robert Hunter, former Texas insurance commissioner and now insurance director at the Consumer Federation of America.
``There have been people who have found they were denied insurance because they're epileptic who weren't,'' he said.
If your MIB report contains inaccurate information, it could take as long as 30 days to straighten out the mess because MIB must go back to the company that originally reported the disputed item to check it.
If MIB finds that the information is indeed wrong or incomplete, it'll delete it or correct it.
If the bureau finds that its information is correct and you still disagree, you'd be permitted to file a brief statement of dispute.
This way, the next time an insurance company checks your MIB report, it'll learn your side of the matter.
Insurance industry representatives said insurers don't use MIB reports as the sole basis for rejecting an applicant or deciding to raise a person's insurance premium.
``They agreed not to do that and they do not do that,'' said Kenneth Vest, spokesman for the American Council of Life Insurance in Washington, D.C. ``We're in the business to cover people, not to deny people.''
Insurers said medical reports are used as red flags of potential health problems.
But a representative of the health insurance industry said a medical bureau report could make a difference to an insurance company.
``I can't say that would never happen, but the rules of the game are such that you cannot take underwriting action based on (an MIB report),'' said Harvie Raymond, an assistant vice president of the Health Insurance Association of America.
That raises the question, how open can you be with your doctor? What if you told him you smoke or like to bungee jump? Is that fair game?
``Yes, if a person did indicate that they were involved in some risky behaviors and the doctor reported it and did also record it, if that report reached the hands of the underwriter, that information would be viewed as being valid information for determining the risk...,'' Raymond said.
And remember, once you've given an insurer permission to check out your medical history, ``it's pretty open,'' said Ed Armstrong, director of the life and health insurance complaints section of the Texas Department of Insurance.
``The company has access to all those records once you sign that release and authorization,'' he said. MEMO: To contact the bureau, write to MIB, Box 105, Essex Station, Boston, MA
02112 or phone (617) 426-3660. If you were not denied insurance because
of a bureau report but want a copy of your file, it costs $8.
KEYWORDS: MEDICAL INFORMATION BUREAU MEDICAL RECORDS HEALTH RECORDS by CNB