Health Insurers Do Deep Data Dive to Estimate Your Healthcare Costs

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by Ed Tobias |

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Every time you post something on social media, pay a bill online, or make an online purchase you leave behind little data footprints. Now, an extensive report by National Public Radio and the nonprofit news organization ProPublica is pulling the curtain back on companies who are selling this data and how health insurance companies can use it.

The information is called “lifestyle data” and, according to the report, health insurers are buying this data big time, running it through complicated computer algorithms and coming up with a picture of what your “lifestyle” may cost them to pay for your healthcare.

The NPR/ProPublica story offers these examples:

“Are you a woman who recently changed your name? You could be newly married and have a pricey pregnancy pending. Or maybe you’re stressed and anxious from a recent divorce. That, too, the computer models predict, may run up your medical bills.

Are you a woman who has purchased plus-size clothing? You’re considered at risk of depression. Mental healthcare can be expensive.

Low-income and a minority? That means, the data brokers say, you are more likely to live in a dilapidated and dangerous neighborhood, increasing your health risks.”

The story reports that some big data companies are doing this data mining; companies such as Optum, IBM Watson Health, and LexisNexis. It reports, for example, that Optum’s marketing materials claim that it’s collected the medical diagnoses, tests, prescriptions, costs, and socioeconomic data of 150 million Americans going back to 1993. (Optum, by the way, is owned by UnitedHealth Group.) A representative of IBM Watson Health told an NPR reporter that his company surveys 80,000 Americans a year to assess lifestyle, attitudes, and behaviors that could relate to healthcare.

Patient advocates are worried

Patient groups are concerned about this. One of their primary worries is that insurance companies may make assumptions about someone’s health based on faulty data. Or because they live in a poor neighborhood but are, in fact, very healthy. The story quotes one data company salesman as joking “God forbid you live on the wrong street these days. You’re going to get lumped in with a lot of bad things.”

Health insurers: There’s a reason to monitor data

Insurers, according to the report, say they collect data to spot health issues their clients may be having to ensure they get the health services they need. They deny that the information is, or will be, used to set someone’s premiums. But in the report, the IBM Watson Health representative admits that socioeconomic analysis can be used to help assess a potential insurance market. For example, if there are too many sick people in a particular geographical area, a health insurer might not want to offer insurance to people who live there.

Join the MS forums: an online community for especially for patients with MS.

Milliman, the world’s largest health actuarial firm, is using LexisNexis scores. Actuaries help set insurance premiums. NPR asked someone in Milliman’s business development department if the company was using LexisNexis scores to price health plans. His answer: “There could be an opportunity.”

Can we do something about this?

Those of us with MS or other chronic diseases are naturally concerned with the cost of our healthcare and health insurance. I don’t know about you, but the idea of using data about where I live, what I buy, and whether I’m single, married, or divorced to set the cost of my health insurance is very troubling.

The NPR story points to Europe’s new General Data Protection Regulation as being an example of something that can limit the kind of data use that I’ve just written about. It also reports an interesting suggestion from Frank Pasquale, a professor at the University of Maryland Francis King Carey School of Law. Pasquale thinks health scores should be treated like credit scores. Federal law gives people the right to know their credit scores and how they’re calculated. If health insurers are going to collect similar data to help calculate the cost of our healthcare, he says, we should be entitled to know how it’s done. I would add that we should also have the right to contest these estimates.

Do you have any other ideas?

You’re invited to visit my personal blog at


Note: Multiple Sclerosis News Today is strictly a news and information website about the disease. It does not provide medical advice, diagnosis, or treatment. This content is not intended to be a substitute for professional medical advice, diagnosis, or treatment. Always seek the advice of your physician or other qualified health provider with any questions you may have regarding a medical condition. Never disregard professional medical advice or delay in seeking it because of something you have read on this website. The opinions expressed in this column are not those of Multiple Sclerosis News Today or its parent company, BioNews Services, and are intended to spark discussion about issues pertaining to multiple sclerosis.


Jeff avatar


There's a point to all this, but you may be close to bordering on paranoia. Yes, insurance companies are FIRST a business that must make a profit to stay in business. And yes, they NEED to make decisions based on where their profits come from. And, also if they can use this information to prod their customers into living a more healthful lifestyle then aren't they actually doing us and themselves a favor?

Any and all information that can be gleaned from your actions from anywhere is available and open to be used and abused. If you're that concerned about what we euphemistically call privacy then don't order anything, call anyone, buy cable or cell services or even browse the internet. Don't ever buy anything, get a credit card, or even step out of your house.

Get real! This is life in the twenty-first century, get over it!

Peggy avatar


OF course will be faulty since meds ARe So EXPENSIVE can't afford them; the info will not show ACTUAL costs.
AND of course will base on the co pay help drug company giving...except those of us on Medicare that DON'T QUALIFY and can't afford them. So again real costs will NOT be accurate in any studies


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