
How Do Insurance Companies Know My Health History? (2017) - technologyvault
http://houseoflawandorder.com/insurance-companies-health-history/
======
dzdt
From the article: _This allows the insurance companies to keep insurance costs
down for both the insured and the insurers._

No! Mathematically the insurance business works the same as long as the
average premiums cover the average costs for the pool. Identifying higher risk
individuals and charging them more does nothing to lower the average cost as
long as they continue to buy insurance. It only spreads the costs around
differently.

That is, unless the idea is to make the cost so high for risky patients as to
force them not to participate in the pool.

Which is I guess what they are saying. It _does_ lower average premiums in the
pool the only way mathematically possible, by forcing at-risk or sick patients
out of coverage.

This raises average costs for the original pool (from before some patients
were priced out) because those patients forced out will show up later at
emergency rooms with expensive problems and no coverage. But that is no longer
the insurance company's problem, so who cares.

Well at a society level there is no forcing people out other than death. So
unless we can get enough sick people to die quickly and cheaply this system
just forces higher costs on everyone.

Or maybe we could just cover everyone in one national pool without keeping a
secret database of everyone's health history to use against them and gouge
them more?

~~~
netcan
I think of it this way:

Say insurers know nothing about customers, just an anonymous number. In this
world they would have to charge everyone the same, the average cost of
insuring a person. Everyone pays the same premium, and has all their medical
bills paid.

In a parallel world, insurers have perfect information. They know your medical
_future_ , not just the history. In this world, insurers will price your
premium at exactly the cost of paying _your_ medical costs. If you won't have
to go to the doctor this year (this is a world where insurers know the
future), you won't be charged anything. If you're going to be in a car
accident, you will be charged for surgery and rehab.

In world no. 2 where insurers have maximum knowledge, insurance basically
doesn't exist. Insurance is exactly the same as just paying your bills
directly. In world 1, insurance works fine, but a 19 y/o pays a little more
than they do today and sick or elderly people pay less than in the real world.

As data/information becomes more ubiquitous, we travel down this continuum.

~~~
zimbatm
Assuming the future is known, there is no risk and therefor need to take an
insurance. It's better to keep the money and remove the insurance admin
overhead.

Call me cynical but in practice I think that kind of asymmetric information is
only going to serve the insurer to rake in bigger benefits.

~~~
Someone
_”and therefore no need to take an insurance”_

I disagree. The _“the lucky should share in the costs of the unlucky”_ aspect
of insurance still is there; the difference is that, in a perfect information
world with self-serving individuals, the need still is there for the unlucky,
but the lucky won’t be willing to take part.

~~~
zimbatm
The argument was based on the premise that the insurer would drop anyone that
would cost more than they pay.

In that system everyone who pays the insurance would be better off putting the
money aside as they wouldn't have to pay for the admin overhead.

Even if the catastrophic event happens early in the timeline it would probably
be better to take out a loan than to pay the insurance.

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denzil_correa
Along with the GDPR, the EU also bought "Right to Explanation" for algorithmic
decision making. Basically, a user has the right to ask for an explanation on
an algorithmic decision. This regulation has been mostly buried in the deluge
of GDPR content but it's an important shift in decision making. There's a nice
paper which outlines the implications and HN too had a discussion on it couple
of years ago [0, 1].

[0] [https://arxiv.org/abs/1606.08813](https://arxiv.org/abs/1606.08813)

[1]
[https://news.ycombinator.com/item?id=12048223](https://news.ycombinator.com/item?id=12048223)

~~~
emilsedgh
That's actually really interesting! I think it really is a good law, although
it may render some things really difficult for engineers.

I remember when Alphago was beating the go master, we couldn't really tell why
it made certain moves.

But it certain makes sense to require an explanation for things that affect us
in our lives.

~~~
moate
Yea, I think showing your work is substantially more important when people's
lives and finances are on the line as opposed to the thrill of victory for a
go master.

If you're making algos for that directly affect another human's basic needs, I
think it's really important to be able to back up why the algo did what it
did. I feel like you're probably opening yourself up to massive liability
(regardless of region your operating in) if you can't explain to a court why
your system did X to a person that resulted in them suing your company.

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pjc50
Rather like the old joke about a banker who will lend you an umbrella while
it's sunny but wants it back when it's raining, it seems that the health
insurance business thrives on trying to avoid as far as possible giving
healthcare to people once they're sick.

~~~
TeMPOraL
I haven't heard the original joke in full, but the way you wrote it, it very
much applies - umbrellas are somewhat useful when it's sunny too, so you get
_some_ benefit from lending one. Similarly, health insurance isn't useless,
but it definitely tries to not be there when needed most.

~~~
jaclaz
JFYI:

[https://quoteinvestigator.com/2011/04/07/banker-
umbrella/](https://quoteinvestigator.com/2011/04/07/banker-umbrella/)

I personally like the 1949 version:

>Definition of a banker: A man who loans you an umbrella when the sun is
shining, asks for it back at the first sprinkle of rain _, and doesn’t own the
umbrella in the first place_.

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fathead_glacier
Collating a private database of health history is an extremely dangerous
practice and I will just drop this article from rms which has further links to
other systems [0].

The article in this post, however, is lacking an explanation of how MIB
gathers the medical records. It is therefore unclear if the users gave their
consent to share the information even if it was through vague fine print. On
the other hand the story would be very different if the data was gathered and
shared without consent and I might wonder if a legal case can be made here.

[0] [https://stallman.org/ancestry.html](https://stallman.org/ancestry.html)

~~~
Spooky23
Your health data isn’t really private.

Various third parties have real-time access to your hospital admissions and
prescriptions, in some cases before your insurer.

As an example, when my wife was admitted to the hospital at 8 weeks for a
miscarriage that almost killed her, the level of detail provided to data
brokers allowed Enfamil to Fedex a big sample box of formula to us on what
would have been the due date of the baby.

No consent was given or needed.

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nwatson
The article doesn't address whether an individual can request a full report of
their own records and those of their dependents from this MIB. I can get a
copy of my credit report for free, same should apply here.

Hmmm ... might be able to get a copy here:
[https://www.mib.com/request_your_record.html](https://www.mib.com/request_your_record.html)

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tinkerteller
Tip: If you are very casual smoker and see a form asking you "Have you ever
smoked?" or "Do you smoke any tobacco?" then say no. If you say yes then you
will see it getting reported to your health insurance and even life insurance
and your premiums will go up as if you were chain smoker.

~~~
sitepodmatt
I'm not sure that's a good tip, presumably if you get lung cancer they can
still detect if you are or have been a casual smoker for a non-trivial amount
of time. In addition, you might put 'No' on signup and be accepted, but a lot
of due diligence (uncovering your real history) is done at the time of claim
i.e. they contact any past doctors and all surrounding hospitals for medical
reports related to your past. Admittedly there is a lot more leeway for
insurance companies in Asia to pursue their denials any way they see fit since
we don't have a first world grasp of privacy or anything remotely like GDPR.

~~~
Retric
Second hand smoke and casual smoking (one per week) are indistinguishable.

~~~
sitepodmatt
Today, maybe. Btw, a side line to the point as do qualify your defintion,
other peoples'' definition of casual and very casual vary a lot, I know people
that if a pack lasts more than one day they consider that casual.

~~~
Retric
I have seen a few definitions of casual smoking, I meant (one _cigarette_ per
week). I have seen not smoking every day, averaging less than one cigarette
per day used.

"Pack year" is often used as a risk assessment:
[https://en.wikipedia.org/wiki/Pack-year](https://en.wikipedia.org/wiki/Pack-
year) 1 pack year in a lifetime is not safe, but it is a vastly lower risk
profile than a pack+ per day smoker.

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kalekold
In the UK, health insurance companies buy data from supermarkets like Tesco
(gathered from loyalty cards) to understand your lifestyle and potential risk
by viewing what you eat and drink over a period of years.

~~~
pflanze
Do you have references about this?

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blackflame7000
Going out on a limb here, but if they are paying the bill, don't you think
they have a pretty good idea what things cost? At the end of the day there are
not that many things that cost $59,324.49 at Hospital X for example. So with a
little deduction you could begin to ballpark the severity of illness

