NU Online News Service, June 17, 2003, 5:38 p.m. EDT – The Federal Fair Credit Reporting Act and other federal laws do an excellent job of protecting personal medical information, and Congress ought to reauthorize the act, insurance industry representatives testified today at a hearing of the House Subcommittee on Financial Institutions and Consumer Credit.
Federal and state laws both keep insurers from disclosing health insurance information in most cases, except with the permission of the insured or for certain very narrowly defined purposes, such as detecting fraud, said L. Chris Petersen, a lawyer who spoke for the Health Insurance Association of America, Washington.
Under the credit reporting act, “for insurance purposes, consumer reports may only be furnished to ?a person who intends to use the information in connection with the underwriting of insurance involving the consumer,’” or to other entities with specific types of legitimate business needs, Petersen testified, according to a written version of his remarks.
But insurers may not share consumer reports that contain medical information without authorization, Petersen said.
Roberta Meyer, who testified for the American Council of Life Insurers, Washington, also emphasized that the credit reporting act limits sharing of consumer reports containing medical information.
“The act acknowledges that it is important for insurers to obtain medical information in connection with underwriting insurance and processing claims,” Meyer said. “At the same time, the FCRA recognizes the highly sensitive nature of medical information and establishes safeguards for consumers.”
But Joy Pritts, who spoke for the Georgetown University Health Policy Institute, argued that the credit reporting act fails to provide adequate protection for medical information collected by banks, insurers and other financial institutions.
Although the act requires financial institutions to give consumers a chance to opt out of arrangements for sharing medical information, “an opt-out essentially presumes permission unless the consumer takes some affirmative action,” Pritts said. “The notices provided by financial institutions, however, are largely written in legalese and are incomprehensible to most consumers. Furthermore, polls have repeatedly shown that consumers want to be asked before their health information is shared with others.”
Congress should amend the credit reporting act to require that companies ask consumers in advance, in plain language, whether they want their medical information shared, Pritts said.
Moreover, “financial institutions should be prohibited from using medical information to provide credit,” Pritts said.
Pritts cited a story from 1993 about a banker who allegedly determined which mortgage borrowers had cancer, then called the borrowers’ mortgages.
The financial institutions subcommittee has posted the written versions of the speakers’ testimony at http://financialservices.house.gov/hearings.asp?formmode=detail&hearing=231