Individuals applying for health, disability, or life insurance are being turned down based on information reported to medicaldatabanks without their knowledge or consent. Sometimes they are defined as poor risks based on inaccurate, indirect, or far-reaching inferences from the available information. Knowledgeable consumers may well forego tests that would benefit their health in order to preserve their insurability. Employers frequently obtain supposedly confidential health information and may use it against their employees. In a University of Illinois study, half of the Fortune 500 companies admitted they use confidential medical records to make employment decisions.
Companies obtain the information in various ways.
Sometimes they purchase it from private medical databases, such as the Medical Information Bureau. If employers administer payment of health claims themselves, they have direct access to the information. If they contract with a managed care company for that purpose, some are known to communicate quite freely with that managed care company about specific employees. Even though there are some laws against these practices, enforcement mechanisms are either weak or nonexistent. If the Department of Corporations takes any action against an HMO, it is generally done in secret.