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The Medical Information Bureau
If you have ever applied as an individual for life, health
or disability insurance, then chances are you're in a database
at the Medical Information Bureau (MIB). Established in 1902,
this Boston-based company provides about 600 life insurance
companies -- many of which also offer health or disability
coverage -- with medical information about individuals. In
return, member companies report information to the MIB. It's
a way for insurers to compare notes on applicants without
having to contact one another directly. The MIB says it was
established to combat fraud by providing a place where insurance
companies can double-check the information provided by people
applying for coverage.
For example, a man with high blood pressure may want to buy
a life insurance policy, but he's aware that mentioning his
medical condition means his application will be denied. By
checking with the MIB, a life insurance company can make sure
that the information provided on the application is accurate.
If the MIB files show he has high blood pressure, then the
life insurance company can dig deeper before issuing a policy.
Insurance companies pay a fee to become members of the MIB,
and they also pay a fee every time they request information
from the MIB's databases. Member companies agree to report
to the MIB any medical conditions that might be of interest
to other insurance company underwriters. What kinds of medical
conditions? "Almost any medical condition you could think
of," says Terry Philbrook, underwriting manager for UNUM
Insurance Co., one of the largest disability insurers in the
country. Common colds are out, but high blood pressure, back
strain and abnormal lab results -- about 230 different conditions
and test results -- could end up in the MIB database. Having
a record in the MIB doesn't necessarily mean that you'll be
denied coverage, but it could mean you'll pay higher rates.
You're supposed to be notified when you apply that the insurance
company plans to check the MIB for any record of you, but
that notification may be buried in fine print. If you want
to know for sure, ask the agent when you fill out the application.
And if you know you have a medical condition that might nix
your application, think long and hard before applying for
individual coverage. Once the database has a record showing
you've been denied, it'll be harder for you to get any kind
of individual life, health or disability coverage.
In certain circumstances, you could end up with an MIB record
even if you have group coverage. Members of very small groups
(less than 10 people, say), late enrollees and people who
request more coverage than usual may all end up being treated
as though they were applying for individual coverage. Hence,
any information about medical conditions on your group application
could be reported to the MIB.
Getting your hands
on your MIB records
The MIB database may keep people honest when they're filling
out their applications, but it is far from fail-safe. According
to the MIB, it has records on only one or two out of every
10 people who apply for individual insurance. Nonetheless,
its database does contain files on about 16 million individuals.
How many of those records are inaccurate? The exact number
is hard to determine, but the MIB estimates that about 3%
of its records contain mistakes. "We had 650 people last
year who sought corrections," says Jim Corbett, vice
president of the MIB.
"One of the best ways to ensure the accuracy of our
database is to encourage disclosure, and to correct it where
information is wrong," says Corbett. About 150,000 people
request their MIB records every year, a rather paltry number
when you consider the total size of the database. While the
MIB has made efforts to raise awareness about its existence
among consumers, it's still a little-known entity.
The MIB is similar to consumer credit reporting services.
For instance, it purges records that have been in the system
for more than seven years. Under the Fair Credit Reporting
Act, you have a right to see and correct the information the
MIB has on you. Some states have also adopted laws specifically
dealing with the confidentiality of medical records; the MIB
and member companies doing business in those states would
also be subject to those laws. "Most companies will comply
with both laws," says Corbett. "It's easier to have
one standard."
Member companies of the MIB also have to comply with the
bureau's own privacy standards. "They pledge to use the
information only [within that] member company and only for
the purposes of underwriting an application or for looking
at a claim," says Corbett.
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