The things that we do impact our lives. The foods we eat, how much sleep we get, exercise (or lack thereof), even what we watch on TV can have an impact on our health (both physical and mental). This isn’t news to us as most rational people recognize the correlation between our actions and our health, but what if our health insurance companies new all these details about us? Would we change our behavior if it impacted our ability to be insured or increased our health insurance rates? Or, would we simply try hiding these specific details of our life so that those that could use this information against us wouldn’t have access to it?
A recent report from NPR outlines how large health insurers are partnering with data collection firms to learn more about you. Why? We often talk about the ‘crystal ball’ factor when it comes to insurers setting premiums. Underwriters want to be able to, in some ways, predict the future to be sure they are collecting enough premiums to cover their aggregated risk. To accomplish this, historically, health insurance companies have utilized known data about their consumers’ health history combined with statistical data based on things like where you live, your gender, age and even your job. Provisions within the Affordable Care Act, however, have limited insurer’s ability to protect themselves from specific losses as they cannot impose things like pre-existing conditions, gender specific premiums or even limitations on certain benefits. Because of this, health insurers are looking to more creative ways to clear up the fog within their metaphorical crystal ball and allow for more effective means of predicting costs. To accomplish this, they are tracking you.
We have become a ‘public’ society in recent years, revealing via social media many, if not most, aspects of our daily life. What restaurant or bar we checked into, the picture of a fun and exciting activity we’re doing with our friends, and in some cases, even an emoji showing our mood. These things all reveal specific information about us and we’re willing to put into social media sphere for the world to see.
According to the piece in NPR, Eric McCulley, director of strategic solutions for LexisNexis Risk Solutions (a large data collection firm), stated, “We sit on oceans of data. The fact is, our data is in the public domain,” he stated, claiming that their firm didn’t put the data out there, they’re just collecting it. To say differently, Mr. McCulley is just gathering what you and I are willingly posting.
WHAT WILL INSURERS DO WITH THIS DATA?
Will insurers use this data to set your health insurance premiums? Likely they won’t do this directly, as the Affordable Care Act has specific regulations preventing insurers from rating individuals based on their specific conditions and lifestyles; however, in the aggregate, this data will allow insurers to set overall premium factors for geographic locations, certain demographics and even employer groups.
How, you might ask?
Outside of Medicare and Medicaid, there are two primary avenues that most U.S. citizens gain access to health insurance:
- The individual Market; and
- Through their employer
As a result of the ACA, insurers within the individual market must set insurance premiums based on what is called ‘community rating.’ What this means is that insurers must consider a specific geographic region when setting age-specific rates. Take where I live in the Dallas/Fort Worth area of Texas. Certain zip codes will reveal to insurers patterns of activity. More affluent areas likely have better access to healthcare providers, a higher level of engagement with preventative care, and even things like a higher propensity of consumers going ‘gluten free.’ While other areas with lower income rates, may show populations that are working more labor intensive jobs, night shifts, and thus more runs to the local fast food joints than the fresh vegetable market.
Sounds like class warfare a bit, but it’s true – these things impact health insurers cost, thus their shareholders returns, thus your premiums. As a result, insurers are looking at their customers within these specific geographic regions and are now studying patterns of activity, economic factors, access to healthcare, etc.
Within the employer market, insurers have more flexibility to set premiums than they do in the individual market. When setting employer sponsored rates, insurers are able to look at specific census data inclusive of gender, age and home zip code. Once enrolled, they now know names and social security numbers.
Want me to keep going?
Historically, insurers relied on limited demographic and geographic data along with historical claims to set rates in the employer market, but now, they can look to data brokers to tell them more. More about the employees at each specific group. More about you!
WHAT CAN WE DO TO PREVENT THIS?
Barring congressional involvement, this data mining is perfectly legal. Social media sites along with even banks (think free checking account) and survey companies offering free trinkets if you’ll answer just a few short question, have attorneys who’ve drafted lengthy ‘terms and conditions’ clauses (you know, the ones we all check that we’ve read) effectively giving them your permission to gather this data and do with it whatever they want.
So, what can you do?
Short of going completely off the grid, there are a few things you can do to protect yourself from possibly falling into the trap of giving insurers more information:
- In short, stop posting everything about your life on social media. Yes, likes and retweets make us feel good in the short term, but in the end they can be hurting us long term. Social media sites are free, thus they need to generate revenue by other means – one of this is selling your data. With this knowledge in hand, stop posting everything, checking in everywhere, and giving this easy access to details specific to you.
- Recognize that there is no such thing as a ‘free lunch.’ If it’s not costing money, it’s likely costing something else – in this case, data. For example:
- That free checking account at the bank might allow that financial institution to sell your shopping patterns.
- Spin the wheel for a chance to win a weekend stay at a luxurious resort – all you have to do is answer a few simple questions? Yea, that’s data gathering too – avoid it.
- The fun late-night survey on social media inquiring as to your knowledge about Game of Thrones? Yea, that’s data gathering too. We While this isn’t new information?– most of us recognize that our actions can impact our wellbeing – the way in which Health Insurer’s might be gathering more information to understand more aspects of our health is news. A a recent report by NPR outlined that Health Insurance companies are now working with data collection firms to mine for data that they normally would not be able to get by simply insuring your health. The things you purchase, websites you visit, and even things you post on social media, are now being collected by health insurers to better understand you, their consumer, the risk you pose to them, and how they can better manage that risk to insure profitability and high returns to their shareholders.
- Read the Terms and Conditions. I know that this is cumbersome, but if an organization has paid an attorney untold sums of money to draft those 20 pages of T&C’s then likely they’re trying to get something in return. Be aware and if you’re not willing to read them, don’t check the box saying you have. You could be giving away your data.
TO LEARN MORE, VISIT GDP'S PRESS PAGE @ https://gdpadvisors.com/press/ TO HEAR SETH DISCUSS THIS ON VARIOUS MEDIA OUTLETS INCLUDING FOX NEWS & CBS.