Medical Information Bureau (MIB) Reports and How They Affect Your Insurance Rates
Tuesday, March 9, 2021
By Amanda I. Forbes, J.D.
When you apply for insurance, an insurance company will look at various factors regarding your history to determine how much your insurance policy will cost. Most insurers obtain a report from the Medical Information Bureau ("MIB") and use this in determining the risk you pose and, hence, your policy premium.
The MIB checks past records to identify any errors, misrepresentations, or omissions made on an insurance application. An MIB report is similar to a credit report except it is specifically tailored for the insurance process. Click here to learn more.
What Does the MIB do?
Since 1902, the MIB has worked as a not-for-profit organization in the United States and Canada. Its members (e.g., life insurance companies, health insurance companies, disability insurers, etc.) use the MIB to help them determine a person's "risk and eligibility during the underwriting of life, health, disability income, critical illness, and long-term care insurance policies." Learn more about the organization here.
Insurance applications, whether for health, life, disability, critical illness, or long-term care, will almost always have several health questions that help the insurance company determine an appropriate risk classification for that individual. The higher the risk, the higher the premium, usually. Traditionally, some applicants in very high risk categories (transplant patients, those with serious long-term chronic medical conditions) or in high risk professions (e.g., parachuting instructors, trapeze artists, explosives experts) may not be able to obtain insurance at all.
Sometimes an applicant for an insurance policy may try to obtain lower premiums by knowingly omitting key information on their applications. Because of this, insurance companies started to rely on MIB reports to identify and prevent insurance fraud. The MIB provides information that can be used to identify false or incomplete applications.
It is estimated that the MIB saves its member companies over $1 billion annually (Note: I think this estimate probably comes form the MIB). It can do this because the information it provides to its members allows them to evaluate and assess risk more accurately. MIB's members share information with MIB in a coded format to protect individuals' privacy.
When a member company wants to search MIB's database or report information to the MIB, it must first give the individual MIB a "pre-notice." However, this is often buried in the fine print of the insurance application. The MIB "pre-notice" advises the individual that a report of their medical condition may be provided to MIB.
When the individual later applies for insurance with a different company that is a member of MIB, then MIB may provide that company with an MIB report.
After the individual receives MIB "pre-notice," they are requested to sign an authorization. The authorization advises the individual that MIB is an information source, as well as others that may have records about the individual (e.g., primary care physician). The signed authorization permits the member company to receive and share information with MIB. Learn more about MIB "pre-notice" here.
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About the Author: Amanda I. Forbes, practices health law with The Health Law Firm in its Altamonte Springs, Florida, office. Its main office is in Orlando, Florida, area. www.TheHealthLawFirm.com. The Health Law Firm, 1101 Douglas Ave. Suite 1000, Altamonte Springs, FL 32714, Phone: (407) 331-6620 or toll-free: (888) 331-6620.
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