Prescription History and Cost of Health Insurance

When you apply for health or medical insurance, there will be a number of judgments used by the underwriters to determine how much they will charge you to insure you.

Since, by law, insurers can no longer refuse to insure you (as of passage of the Affordable Care Act), they must instead determine how much it will cost to pay for your care, which they then add to the amount of profit they expect to make, too. The total will comprise your health insurance premium.

The Collection of Medical Data

In order to make those judgments, they will purchase data from a variety of sources—data about you and your health that you were probably never aware was being collected. Among those pieces of data will be your Medical Information Bureau report, your credit score, your prescription history, and your medication adherence score.

Most of us have no idea that anyone besides ourselves or our healthcare providers, is keeping a history of our prescriptions. In fact, that history can be purchased by insurers and others from two companies. The IntelliScript database (produced by a company called Milliman) and the MedPoint database (produced by a company called OPTUMInsight) both track this data, then sell it to health, disability, and life insurance companies.

Since the information pertains to individuals’ health and care, both these companies are required to adhere to HIPAA laws. They cannot sell or share the information without your permission. However, in order to apply for health insurance, you are required to give that permission.

To pull this data together in a form that they can sell to insurers, IntelliScript and MedPoint purchase information from Pharmacy Benefits Managers (PBMs). PBMs range from your corner pharmacy (which is probably part of a larger chain) to large mail-order pharmacies like Express Scripts or CVS Caremark. When you fill your prescriptions at any of the PBMs, they are able to track who your practitioner is (and therefore what his or her specialty is), the drugs and dosages your healthcare provider has prescribed for you for any reason, whether or not you filled the prescription, and whether or not it was refilled.

From that data, they can draw a number of conclusions:

• They can figure out what your diagnosis is, or at least a close approximation, and therefore whether you have (or had) an acute problem (one that will go away) or a chronic problem (which will either recur on occasion or bother you for the rest of your life).
• They can also tell the extent to which your diagnosis affects you by the strength of the dosage or how often your healthcare provider thinks you should take it. An acute problem may not bother you anymore, so it won’t cost them much money, if anything. But a chronic problem, like diabetes or heart disease, even just high blood pressure, may get very expensive over time. When they see chronic problems that are at all advanced, it will be a clue to the underwriters that they need to project even more cost to the company and raise your premiums accordingly.
• They can determine if you have comorbidities, meaning, more than one thing wrong with you. The combination of medical problems can cost them even more than the cost of treating each problem individually. For example, the cost of treating heart disease and cancer at the same time can be more expensive than treating heart disease in one patient plus cancer in another patient.
• The data will reflect how regularly you fill your prescriptions and therefore, whether or not you are adherent. This is information similar to that projected by FICO’s medication adherence score which the underwriters may use to compare. If you are adherent, of course, your drug prescriptions will have a cost they can project. But it may also tell them, depending on your diagnosis, that you are controlling the problem and therefore that there won’t be bigger costs in the short term that are not anticipated.
• The underwriters will also look to see if you have been prescribed pain drugs for any length of time. If you needed them a few years ago but haven’t filled a prescription for them recently, then there won’t be additional expense. But if you are currently taking pain pills, and if the dosage has increased either in strength or frequency, it will be a red flag to the underwriters that they need to raise the cost of your premiums. They may try to assess if you are abusing the drugs, for example. Or they may decide to charge you more for even bigger problems which may result if you continue seeking care for your pain, or even more expense in pain drugs.

There may be other conclusions these companies draw from the use of your prescription history, too. And over time, as more and more information becomes available from additional sources like loyalty reward cards, underwriters will judge additional aspects of how you lead your life and price their insurance premiums accordingly.

Patient Protection

Unfortunately, it makes no difference if their conclusions and judgments are, or are not, correct. And the cost to you will be based on those conclusions, no matter how wrong they might be.

There is little or nothing patients can do to protect themselves from this information except to make sure it the prescription history data is correct. Since it is used to determine the cost of your insurance, both IntelliScript and MedPoint must, by law, adhere to the Fair Credit Reporting Act (FCRA). That means that, just like your credit score, you can request a copy of your pharmacy history report for free from either of these organizations once a year, or at the point you are turned down for life or disability insurance.

Obtain Your Medical Records

It makes sense then, if you are in the market for health insurance, that you obtain a copy of your medical records (all records, not just your pharmaceutical history), review them carefully, and correct any errors.