How Surfing the Internet Can Raise Your Health Insurance Costs

The health insurance industry is now judging consumers based on their nonmedical personal information. Here's how this can cost you -- and what you can do about it.

How Surfing the Internet Can Raise Your Health Insurance Costs Photo by MaximP / Shutterstock.com

In a world where nearly everything is connected to the internet, many folks divulge more personal information online than they likely realize.

Part of the trouble with this is that companies known as data brokers collect these details of your life history and lifestyle, offering them to companies like health insurers. And some insurers use such information to determine how risky it would be to insure you or how much to charge you, according to a recent report by ProPublica and NPR.

What it means for you

The article — the latest in a series about tactics the health insurance industry uses to maximize profits — explains:

“The companies are tracking your race, education level, TV habits, marital status, net worth. They’re collecting what you post on social media, whether you’re behind on your bills, what you order online. Then they feed this information into complicated computer algorithms that spit out predictions about how much your health care could cost them.”

Because this is lifestyle data rather than medical information, it’s not protected under the federal privacy law known as the Health Insurance Portability and Accountability Act, or HIPAA. So, companies can collect and share such data without your permission.

ProPublica and NPR report that, to some experts, this practice raises concerns not only about privacy but also about discrimination.

Inferences about your health that are based on your lifestyle may be inaccurate. So, if a health insurer makes such inferences and charges you based on them, the company could end up raising your rates based on false information.

Insurers could also more easily discriminate against folks whom they have labeled high-risk — even if that label is based on an erroneous assumption.

The article continues:

“Patient advocates … say the use of the data raises thorny questions that should be debated publicly, such as: Should a person’s rates be raised because algorithms say they are more likely to run up medical bills? Such questions would be moot in Europe, where a strict law took effect in May that bans trading in personal data.”

What you can do about it

So, what can you do to protect your information and wallet in this brave new world?

One option is to lobby your federal lawmakers to adopt legislation like the General Data Protection Regulation, the data privacy law that recently took effect in Europe.

Another step is to learn what you can about what health data brokers and health insurers already know about you.

As we detailed after the Equifax data breach, medical consumer reporting companies like MIB and Milliman IntelliScript track your medical data just as credit reporting companies like Equifax, Experian and TransUnion track your credit data.

You can request copies of your medical consumer report from MIB and Milliman — see “Want to Keep Your Money Safe? This Is the One List You Need.”

These reports may not reflect the full extent of information that such companies offer to health insurers, but regularly reviewing your medical consumer reports is still wise. As with your credit report, watch out for errors. They could stem from medical identity theft that you were unaware of. Correct any errors you find, so companies cannot judge you based on that misinformation.

Perhaps most importantly, consider your online life. You may not be able to take back personal information that data brokers have already scraped from the web, but you can be more cognizant of the information you share online going forward.

When you use a free online service or free app, it’s fair to assume the company behind the service or app is collecting information about you and profiting from it in some way. Businesses run on money, after all.

In many cases, it’s as seemingly harmless as a company sharing “deidentified” data — basically, data without names attached — for targeted advertising purposes. But if there’s any lesson to learn from Facebook’s recent privacy scandal, it’s that you can never be sure what a company will do with your data.

The only way to control how companies from social media websites to health insurers use your personal information is to not share that information with any corner of the internet to begin with, thereby keeping it out of reach of data brokers and their ilk.

What’s your take on this news? Sound off in a comment below or on our Facebook page.

Karla Bowsher
Karla Bowsher
I’m a freelance journalist and former newspaper reporter who has covered both personal and public finance. I've worked for a top 50 major metro daily and a community newspaper as well as ... More

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