Tuesday, July 04, 2006

M.I.B. (NOT Smith & Jones)

Conventional wisdom ("common knowledge") is interesting, fun, and most often, wrong. What prompts me to make this observation is an email I recently received:
"I was very surprised with a little known fact concerning the Medical Insurance Board (MIB). Do consumers really understand the ramifications of their medical history in this system?"

Apparently, my correspondent has had some recent troubles obtaining health insurance. I'm still not sure what, exactly, the missive's author wants from me; I replied, of course, and am waiting for more information.

In the meantime, it may be useful to bust a few myths about what the Medical Information Bureau really is, and what it really does:

First, the MIB does not keep a copy of one's medical records. One doesn't really even need to read the FAQ on their website to know this; it just doesn't pass the "smell test." Think about it: even before the draconian privacy measures mandated by HIPAA (which, we'll grant, aren't exactly enthusiatically enforced), how would such an organization go about getting all the files from all the doc's that one has ever seen? And where in the Wide, Wide World of Sports would they keep them?

Second, only folks who have applied for insurance (life or health) from one of the 600 companies who participate are even subject to its "review" (IIRC, there are something like 1,800 such carriers). And of these, the Bureau is informed regarding only those who have been rated or declined. Then, if such a person applies for another policy, with another participating carrier, will it even matter?

Third, these notes are kept for a maximum of seven years, after which they are purged. So it's not "forever," anyway.

It is true that most (if not all) life and health applications (and to be accurate, I'm lumping in Disability and Long Term Care policies under the general heading of Life and Health) include a question regarding previous insurance experiences. That is, they ask if one has ever been rated or declined for insurance. Some carriers give this question (and its implications) greater weight than others; conversely, some carriers are notoriously stringent in their underwriting process, and that has a certain significance, as well.

The primary mission of the M.I.B. is "to detect and deter attempts by applicants of life, health, disability, or long-term insurance who would omit or misrepresent facts." This is actually a powerful tool for us consumers: fraud helps drive up the cost of insurance (as if it needed any help to get more expensive). By working to minimize it, organizations like the M.I.B. help to hold down those increases.

While I take each email (and, for that matter, each comment) seriously, I think that sometimes folks let their imaginations run a bit wild. It may well be that this person has had a bad experience, and I will try my best to help resolve it. But the M.I.B. isn't the enemy.
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