There likely will be "a future in which everything you do — the things you buy, the food you eat, the time you spend watching TV — may help determine how much you pay for health insurance.
With little public scrutiny, the health insurance industry has joined forces with data brokers to vacuum up personal details about hundreds of millions of Americans, including, odds are, many readers of this story.
The companies are tracking your race, education level, TV habits, marital status, net worth. They’re collecting what you post on social media, whether you’re behind on your bills, what you order online. Then they feed this information into complicated computer algorithms that spit out predictions about how much your health care could cost them…"
…The data contained each person’s habits and hobbies, like whether they owned a gun, and if so, what type, she said. It included whether they had magazine subscriptions, liked to ride bikes or run marathons. It had hundreds of personal details about each person.
I wonder in which direction my health insurance rate might go if the insurer found me on the DMA “Deceased - Do Not Contact” List
I’m not against smokers and other addicts paying more for health insurance, but otherwise this sounds ridiculous. Garbage in - garbage out.
The problem is, even if the ACA protections remain in place, employers will try to use this data in hiring decisions (since all but the smallest employers have self-funded health plans). We already see this type of behavior in a cruder form, age discrimination against older people (illegal for 40+, but difficult to pursue). This may not be an issue for workers in some of the more in-demand professions (e.g. doctors or lawyers), but that’s not universal – many would consider tech to be an in-demand industry, but older workers in that industry frequently report discrimination. (See, for one example, ProPublica’s reporting on age discrimination at IBM.)
The difference in treatment of older workers in high-demand fields probably comes down to whether experience is perceived as an advantage. For software developers, the difference between a 20-year veteran and a younger, but very competent, developer may be less obvious (which does not mean non-existent), whereas it sort of goes without saying that many people would prefer to have a more experienced doctor. This is not going to end well for the bulk of the workforce that doesn’t have the leverage a doctor or lawyer would.
It’s speculative on my part. Companies are already known to consider health costs in hiring decisions using proxies like age, as you mentioned, and to fire employees with high health costs (look for ERISA § 510 lawsuits). From there, it’s a logical next step that if a more precise way of estimating health costs pre-hiring was available, companies would consider that data in their hiring decisions. One person quoted in the NPR/ProPublica article shares this concern:
I don’t think an individual employer is going to go datamine your life and hire/fire you based on that.
OTOH if some company starts a service that datamines people then compiles a “social profile” or something (ala what China is doing to its citizens) which has data such as the health insurers are compiling that profile might be sold similar to credit reports. I could see a business today using such a reporting service to profile their own hires similar to how some use credit reports now (if not illegal at state level).
No, most employers wouldn’t do the data mining on their own; they’ll buy/rent the data and models from data brokers like LexisNexis. The exception might be the largest employers that are able to collect relevant data in their own operations (imagine, perhaps, Walmart creating models to estimate health costs using data from claims on their self-funded health plan and their employees’ shopping habits, since many Walmart employees probably do a lot of their shopping there).
Kaiser has some data. “All but the smallest” may have been a bit of an overstatement on my part, but still, most insured workers are in a self-funded plan according to Kaiser.
Self-funding means the employer directly assumes the insurance risk (though some plans also have stop-loss coverage); the insurance company (BCBS or whoever) only provides administrative services and assumes no financial responsibility for claims. The premiums are set based on the plan’s actual claims experience, so an employer with a lot of sick employees (or employees whose covered spouse/children are sick) will pay more. Consequently, the employer has every incentive to try to cherry-pick the risk pool by not hiring employees likely to have more claims or firing employees who do have a high number of claims (illegal, but still happens).
Thanks. I would have been surprised if only firms with <200 workers were buying insurance and all others were self-funding. However, the actual percentage of employers self funding (according to Kaiser) is higher than I thought it would be.
