Although still a relatively small percentage of identity theft cases, medical identity fraud is particulary expensive. Worse, it's the only kind of ID theft that could kill.
When it comes to identity theft, one of the fastest-growing concerns is the improper use of medical information, according to a recent Ponemon Institute study. Costs for victims can be particularly high, and the crime can take especially long to recognize, the study said.
About 1.5 million Americans have suffered from medical identity fraud, according to the study, but it still constitutes a relatively small part of overall ID theft. About 9 percent of Americans have been victimized by ID theft, according to Ponemon; only 6 percent of those cases concerned medical ID fraud.
But medical theft costs are particularly high. The total cost to consumers is about $29 billion, or about $20,000 per person. Effects can also include medical dangers, including misdiagnoses because the medical history now includes items that weren’t really tied to the patient’s own medical services. This can be particularly damaging in emergency situations in which a patient can’t answer questions, says Mike Spinney, a Ponemon senior privacy analyst. Some say “it’s the only kind of ID theft that can kill.”
It can also be devastating if it affects insurability. Forty-eight percent of study respondents said they lost their healthcare coverage completely due to the theft. More than half of those losing coverage said they had to pay for expenses out-of- pocket. Thirty-two percent of victims noted an increase in existing insurance premiums.
According to the study, more than 50 percent of consumers didn’t discover that they had been victimized until at least a year after the incident or incidents had occurred. Only 6 percent received a timely notification that their medical records had been breached. Medical ID theft resolution can also be challenging. Just 9 percent of respondents said they had fully restored their identity.
Actual medical theft incidents are likely higher, the study found, as 46 percent of victims said they did not report the theft to authorities. About half of this group said they did not report the theft because they were close to the perpetrator and did not want to subject him or her to legal trouble, according to the report.
One of the most common methods of medical ID theft involves the use of a stolen medical ID card, the survey found.
One way people can better protect themselves is with ID protection services, according to the study. Consumers could look for services with experience in settling medical-related cases. Some services can automatically cancel medical insurance cards for the victim, for instance, when a customer discovers that their wallet is missing.
Consumers should be sure they are getting what they pay for, however. For example, in one of the largest settlements ever, LifeLock, Inc., has agreed to pay $11 million to the Federal Trade Commission (FTC) and $1 million to a group of 35 state attorneys general to settle charges that the company used false claims to promote its identity theft protection services.
As the FTC’s press release explains: “The FTC’s complaint charged that the fraud alerts that LifeLock placed on customers’ credit files protected only against certain forms of identity theft and gave them no protection against the misuse of existing accounts, the most common type of identity theft.” It also allegedly provided no protection against medical identity theft or employment identity theft, in which thieves use personal information to get medical care or to apply for jobs.