An invasion of privacy

Wednesday, April 1, 2009 | 2:08 a.m.

Insurance companies routinely take a close look at people who apply for medical coverage before deciding whether to offer them policies. What most people don’t know is how closely the companies look.

Insurers are hiring data-mining companies, which use a variety of databases to compile detailed reports about a person’s medical history. Insurance companies say they need that information to determine whether applicants have failed to tell them anything, but the reports do far more than that.

For example, one data-mining company, Ingenix, offers insurance companies a five-year history of a person’s prescription drug use as well as a list of potential diagnoses for the person. Based on that, the company offers insurers an assessment of whether the applicant should be offered insurance.

The criteria differ by company, but the Miami Herald reported last week that several companies automatically reject people with gallstones, rheumatoid arthritis or diabetes. Also on the list for rejection are people who use certain drugs, including anti-clotting Plavix and sleep aid Seroquel.

Ingenix says the information helps insurers control costs and increase revenue. In other words, the insurance companies want to invade people’s privacy so they can reject them and boost their bottom lines.

That is not a good reason for delving this deeply into a person’s privacy. The data-mining companies say they gather the medical information only if the applicant has given signed consent. Of course, when people apply for the insurance, they have to give consent to the background check.

In the end, some people won’t get treatment because they have been rejected for coverage. In the long run, that will only cost taxpayers more money in public health expenses, and if the companies are allowed to continue with this practice, it will cost everyone a loss of privacy.