Recent articles in mainstream publications have raised questions on some quarters regarding the use of Rx (pharmacy) profiles in underwriting.
Does this work to the detriment of the best interests of insurance seekers?
The short answer is absolutely not, as the following will clearly demonstrate.
What does Rx profile mean? Pharmacy benefit management (PBM) firms gather prescription records for use primarily in ways unrelated to the life insurance industry. But some industry service providers have business arrangements with PBMs which allow the providers to access certain bits of information on prescriptions filled by the majority (roughly 70%) of insurance applicants.
This is not done surreptitiously. Profiles can only be obtained with proper signed authorization from the proposed insured, in the same manner as is done with Medical Information Bureau and physicians’ records.
The pharmacy records tell underwriters the medications prescribed for the individual in the recent past as well as when the prescriptions were first filled, if and when the prescription were refilled, details such as dosage and the identity of the prescribing physician.
In essence, use of Rx profiles is really no different than the industry’s longstanding practice of screening urine or oral fluid for the presence of the nicotine byproduct called cotinine. By doing this, underwriters identify individuals who have failed to disclose their use of tobacco or nicotine products used primarily in quitting smoking.
The premise is the same with Rx profiles. Insurers routinely ask on their applications if the proposed insured takes prescription medication. When the answer is “yes,” the person is asked for more details to put the use of each drug in its clinical context.
Thus, Rx profiles and cotinine tests do essentially the same thing: pinpoint potential nondisclosure. However, this is only one–and often not the most important–way that Rx profiles impact risk appraisal.