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The "Farmers Insurance News-Alert" website is dedicated to providing the consumer and general public with detailed information concerning the Farmers Insurance Group. This includes fraud reports, consumer complaints, lawsuit's and other legal actions taken against this company. All information contained herein is for educational purposes only. Original sources, when known are sited.

 

No one but you will protect
your private information

By Ryan O'Neil

What protects your personal information once it leaves your hands? Often, it is little more than a decades-old federal law, a similarly outmoded state law, and the good will of your insurance company. Sometimes, it might be even less.

Naturally, this privacy protection often doesn't go far enough. For example, while out on a speaking tour in her state, Kansas Insurance Commissioner Kathleen Sebelius heard a horror story. A man told her that he had been to his doctor and had tested positive for diabetes. The man didn't tell anyone because he wanted to give himself time to get used to the news before he broke it to friends and family. Before he got that chance, he started receiving catalogs in the mail from medical-supply companies trying to sell him diabetic supplies. In this case, the trafficking of information between companies had probably moved faster than the man did to get back home.

A privacy law on the horizon At a recent meeting of the National Association of Insurance Commissioners (NAIC), Sebelius headed a committee that drafted a "model law" covering medical records privacy, known as the Health Information Privacy Act. As the name implies, individual states use model laws as a template for their own legislation. Often, a state will pass an NAIC-drafted model law virtually unchanged.

According to Sebelius, the aim of this model law is to protect consumers form the unauthorized collection, use, distribution, and sale of medical information. Unfortunately, only Washington and Montana have enacted similar laws. Another very few states — Kansas and Vermont among them — have introduced it before their state legislatures.

Steps to protect your medical records

Obtain a copy of medical record from your doctor so you know what's in it. Make this request via letter, not phone call.
Contact your HMO or insurance company about its policy regarding your medical records. Specifically inquire about who they release the information to.
If you have a condition you definitely don't want your insurance company or your HMO to discover, the Electronic Privacy Information Coalition suggests going to a doctor other than your usual doctor, and paying the bill yourself (preferably, in cash).
When signing a release waiver, don't sign a blanket release. Instead, authorize the release of records relating only to that particular treatment.
Notify the Medical Information Bureau not to release your information without your notarized consent and revoke all previous consent. (Read See what your insurer sees on how to do that.)
Fire up your computer. Write your state and federal representatives and let them know you are in favor of medical-records privacy legislation.
Medical records are often stored according to Social Security Number. Be cautious about to whom you give your SSN.
Give your physician all of the information necessary for your treatment; however, Consumer Reports suggests that you think twice before disclosing information that has no bearing on your health.

How are these records being created? One of the ways medical records are created is routine. You visit your doctor, and he or she maintains a file for you that contains all of the information about your visits. This information is usually passed on to your insurance company or HMO for billing reasons.

When you apply for a life insurance policy, an insurance company often requires a physical exam and blood tests. The company saves the information gathered from these tests.

Visits to mental health professionals can also generate medical records. If you visit a psychiatrist or a therapist and then submit the bill to your HMO or health insurer, this information becomes part of your medical record.

Genetic testing is poised to become another battle in the privacy war. Genetic testing can alert people to any predisposition to inherited diseases. If your HMO or health insurer pays for this test, though, your DNA results will become part of their records, as well. Analysts and lawmakers are just starting to broach the subject of genetic testing and discrimination based on the results of the tests.

Why do you need to protect your medical records?

Many people may not be aware of the breadth of information in medical records. Naturally, the records contain your health history, which will include diagnoses and treatments of any diseases or conditions, tests conducted, even the date of checkups. More ominously, medical records might also contain information about your family history, past or current substance abuse, sexual behavior, records of psychiatric care, and mental illness.

Who's looking at you, kid?

Medical information can be accessed by a variety of people you may not want to see it: prospective or current employers, creditors, and educational institutions. You may be negatively affected by information contained in those records. For example, while testifying before Congress, Secretary of Health and Human Services Donna Shalala retold a story of a woman who was denied disability and life insurance policies. The woman discovered that her records, as kept by the Medical Information Bureau, said she suffered from heart problems and Alzheimer's. She suffered from neither.

Insurance companies also carefully examine your credit history, where allowed by law. The companies claim that credit history provides a highly reliable way to evaluate whether or not a potential policyholder will be a "good customer."

Customers with a bad credit history can either be charged higher premiums or denied coverage altogether. So, when attempting to obtain a new policy, be it life, health, or auto, you would be well-advised to check your credit history for mistakes before contacting insurance companies.

Minnesota Attorney General Mike Hatch recently launched an effort to make it illegal for insurance companies to use this information when evaluating potential policyholders. "According to a report from the NAIC, 'There is continuing controversy about the correlation between credit history and risk of loss,'" says Hatch. He maintains that the practice amounts to nothing less than economic "redlining" or discrimination. "All [examining credit history] does is require lower income consumers to pay more for auto and homeowners insurance than everyone else."

The Insurance Federation of Minnesota (IFM) disagrees with Hatch's assertions. Alvin Parson, president of the IFM, contends, "It's unfortunate that Mr. Hatch assumes low- and moderate-income people manage their credit poorly." Parsons cites a study from Tillinghast-Towers Perrin that shows that credit ratings are an accurate predictor of risk, with a 92 to 99 percent probability.

Privacy resources:
Electronic Privacy Information Center (EPIC)
Threats to your medical privacy, from EPIC
The Privacy Forum
Yahoo's medical privacy links
ACLU's privacy page

Laws aim to strengthen privacy The NAIC's model Health Information Privacy Act aims to protect us from intrusions into our medical records. Currently, Kansas is the only state where the legislature is considering the act, but other state legislatures, including Vermont, have put a high priority on the bill, according to Sebelius.

The act would force all companies and organizations that handle medical records, such as your life insurance company and your HMO, to "develop and implement written policies, standards, and procedures for the management of health information."

One provision in the legislation says that access to your medical records should be granted only to those people who absolutely require it. The bill also says it would be your right to find out the job titles and descriptions of those people. You would also be able to request from your insurance company a copy of the records they have on you and they would be legally required to oblige.

However, with 50 states all enacting their own statutes, one can "end up with a mishmash of laws," says Meg O'Donnell, director of consumer protection in Vermont's Department of Banking, Commerce, and Insurance. "Lots of Vermonters drive over to the Dartmouth Medical Center [in New Hampshire], and while I trust the hospital to take care of their records, these Vermonters won't have the same protections as they would while they were in Vermont. That's why we need federal legislation."

If Congress doesn't pass a health privacy rights bill before Aug. 21, 1999, the Department of Health and Human Services will get to enact rules it has already drawn up, according to the provision in the 1996 Kennedy-Kassebaum law on medical practices (also known as HIPAA).

Secretary of Health and Human Services Donna Shalala has recommended to Congress that their law include certain points. Among them, Secretary Shalala insists that "with a very few exceptions, healthcare information about a consumer should be disclosed for health purposes and health purposes alone."

Laura Levy, a spokesperson for the American Insurance Association, an organization that promotes industry interests, says that the group supports efforts to protect policyholders, but it has concerns about separating workers compensation from health insurance.

"There are a lot of authorization requirements that will be put into the bill and we don't want those to get in the way of the timeliness of worker's compensation payments," says Levy. "If you allow an employee to prevent the insurance company from looking at the medical records but still demand payment, you're inviting fraud."

Insurer privacy policies

State Farm Insurance Co., the nation's largest insurer, has a comprehensive privacy policy. The company says it doesn't share information outside of the company and that records are accessed only by the necessary employees. "We are very private with consumer information," says Steve Zitney, a State Farm underwriter. However, State Farm, like many other insurance companies, is a subscriber to the Medical Information Bureau, an information clearinghouse.

Traveler's Insurance Co. makes its privacy policy available on its Web site, and one of the points states, "We will always maintain control over the confidentiality of our customer records." However, the policy goes on to say that Travelers will "facilitate relevant offers from reputable companies." This means that Traveler's is reserving the right to distribute your information. For example, it has the right to include special offers targeted toward you in your bill envelope, and it can sell its policyholder list to other companies. Marlene Ibsen, spokesperson for Traveler's Life and Casualty division, says her division hasn't done this recently and has no plans to do so. Traveler's does alert policyholders annually in "plain language" of how to remove their names from these marketing lists.

According to John Conniff, deputy insurance commissioner for the state of Washington, a lot of companies don't have privacy policies. "Their attitude is simply, "Trust us,'" says Conniff. He thinks that a lot of insurance companies don't understand where consumers are coming from on this issue. "You have the insurance companies saying, 'We've always been responsible, why are we suddenly evil?' For most consumers, it's not good enough that the insurance companies are 'good guys' who say abuses will probably never happen."

And here's a disconcerting thought: "People in the industry tell me that it is not unusual to hear about interesting and juicy cases in the lunchroom," says Conniff. Perhaps you just have to hope that you're not one of those "interesting and juicy cases."

Last updated Feb. 1, 1999

 

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