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I never heard this before. Can you explain how it protects insurance companies?

AnthonyMouse 7y ago
Insurance companies have incentives to get better data than their competitors, so they can offer less expensive coverage to lower risk people and leave the competing insurance companies with all the higher risk people. Until the competitors do the same thing. Then you're all just offering less expensive coverage to most of your customers and making less money. (That also tends to cause trouble for higher risk patients because insurance companies could more accurately predict ahead of time that they'll incur high costs and then charge them unaffordable premiums.) If the health data they would otherwise use for that is "private" then that isn't allowed, so providing insurance is riskier, will have fewer competitors, and commands higher premiums.
- TheSpiceIsLife 7y ago
  Wikipedia claims: It was created primarily to modernize the flow of healthcare information, stipulate how Personally Identifiable Information maintained by the healthcare and healthcare insurance industries should be protected from fraud and theft, and address limitations on healthcare insurance coverage. Is the protected from fraud and theft part somehow incorrect? https://en.wikipedia.org/wiki/Health_Insurance_Portability_and_Accountability_Act https://en.wikipedia.org/wiki/Health_Insurance_Portability_a...
  - AnthonyMouse 7y ago
    You're now talking about a different section of the same act. There are some separate provisions in there to fight insurance fraud, but that doesn't really have a lot to do with privacy for medical records, except to the extent that having somebody else's medical records might make it easier to commit insurance fraud against their insurance policy.
    - URSpider94 7y ago
      The quote explicitly says that the act covers “how PII ... should be protected from fraud and theft.” HIPAA is ostensibly about protecting patient privacy and data. It’s certainly possible that the insurance industry went along with it because they figured it would help them keep their patient data proprietary, but that most certainly wasn’t the goal of the legislation.
      - AnthonyMouse 7y ago
        What do you think "fraud and theft" mean in this context? Sick people aren't great fraud targets, they're frequently unable to work and have already lost what money they had to medical bills. The "fraud" is insurance fraud, for which the PII would be things like your name and policy number (i.e. what's needed to file a fraudulent claim against your policy) rather than your actual medical records. And the parties most interested in having access your medical records are the insurance companies themselves, as already mentioned. There is a fairly large financial incentive for a shady insurance company to use patient medical records to poach low risk patients.
- licebmi__at__ 7y ago
  In your proposed scenario, I find hard to believe the insurance companies won't form a cartel, keep the prices on the low risk customers, and price out the high risk customers. Somehow I don't believe the explanation.
  - deleted 7y ago
    [deleted]
  - AnthonyMouse 7y ago
    Forming a cartel is a violation of antitrust laws and requires no one to form an insurance company that defects from the cartel in order to make higher profits for themselves. Passing a law against the practice requires neither.

Insurance companies have incentives to get better data than their competitors, so they can offer less expensive coverage to lower risk people and leave the competing insurance companies with all the higher risk people. Until the competitors do the same thing. Then you're all just offering less expensive coverage to most of your customers and making less money. (That also tends to cause trouble for higher risk patients because insurance companies could more accurately predict ahead of time that they'll incur high costs and then charge them unaffordable premiums.) If the health data they would otherwise use for that is "private" then that isn't allowed, so providing insurance is riskier, will have fewer competitors, and commands higher premiums.

TheSpiceIsLife 7y ago
Wikipedia claims: It was created primarily to modernize the flow of healthcare information, stipulate how Personally Identifiable Information maintained by the healthcare and healthcare insurance industries should be protected from fraud and theft, and address limitations on healthcare insurance coverage. Is the protected from fraud and theft part somehow incorrect? https://en.wikipedia.org/wiki/Health_Insurance_Portability_and_Accountability_Act https://en.wikipedia.org/wiki/Health_Insurance_Portability_a...
- AnthonyMouse 7y ago
  You're now talking about a different section of the same act. There are some separate provisions in there to fight insurance fraud, but that doesn't really have a lot to do with privacy for medical records, except to the extent that having somebody else's medical records might make it easier to commit insurance fraud against their insurance policy.
  - URSpider94 7y ago
    The quote explicitly says that the act covers “how PII ... should be protected from fraud and theft.” HIPAA is ostensibly about protecting patient privacy and data. It’s certainly possible that the insurance industry went along with it because they figured it would help them keep their patient data proprietary, but that most certainly wasn’t the goal of the legislation.
    - AnthonyMouse 7y ago
      What do you think "fraud and theft" mean in this context? Sick people aren't great fraud targets, they're frequently unable to work and have already lost what money they had to medical bills. The "fraud" is insurance fraud, for which the PII would be things like your name and policy number (i.e. what's needed to file a fraudulent claim against your policy) rather than your actual medical records. And the parties most interested in having access your medical records are the insurance companies themselves, as already mentioned. There is a fairly large financial incentive for a shady insurance company to use patient medical records to poach low risk patients.
licebmi__at__ 7y ago
In your proposed scenario, I find hard to believe the insurance companies won't form a cartel, keep the prices on the low risk customers, and price out the high risk customers. Somehow I don't believe the explanation.
- deleted 7y ago
  [deleted]
- AnthonyMouse 7y ago
  Forming a cartel is a violation of antitrust laws and requires no one to form an insurance company that defects from the cartel in order to make higher profits for themselves. Passing a law against the practice requires neither.