Tradecraft HAnk GeorGe
Pharmacy Profiles and Life underwriting
PhaRMaCy PROFiLES aRE DETaiLED REPORTS from industry
service firms that show the prescriptions filled and paid for by insurance applicants using insurance prescription benefit cards. The service
firms get their data from companies (called pharmacy benefit managers), which in turn receive the information from pharmacies with which
they have business relationships.
While access to these profiles has
been available for some years now,
it’s only recently that their use in life
underwriting has begun to increase significantly. A survey of 99 U.S. life carriers
recently completed by my firm sought to
ascertain the extent to which insurers
are using prescription profiles, as well
as their experiences and perceptions regarding a wide range of issues related to
this underwriting asset.
The response to the first survey
question was revealing. Of the 99 respondents, only 14 don’t ask specifically
about prescription drug use on their applications. (It’s difficult to fathom why
any carrier wouldn’t raise this question
routinely!) As of mid-2010, 68 percent
of the survey’s respondents used prescription profiles. The rest were divided
between two groups:
■ ■ Those that either used these
profiles and stopped, or don’t
intend to use them;
■ ■ Those that either are considering
their use or haven’t addressed the
question as yet.
Carriers that have stopped using
medication records or said they don’t
intend to start using them cite four main
reasons for their position:
■ ■ Cost;
■ ■ Insufficient protective value;
■ ■ Concerns for possible pushback;
■ ■ Inadequate pharmacy
underwriting guidelines.
The remainder of the survey was for
those carriers that were using pharmacy
reports. It addressed both fully under-
written and simplified-issue business.
The latter is coming on strong now for a
variety of reasons, and prescription pro-
file use in this context is proportionally
greater than on business that’s under-
written in the traditional manner.
patterns of profile use
and impact
Pharmacy histories can go back from one
to five (or more) years, depending on the
wishes of the carrier. More than half of re-
spondents got histories covering at least
five years, while just six limited themselves
to two years or less. Of the 37 firms that had
insight on this question, 31 indicated that
they believed that there’s sufficient value to
justify obtaining multiple years of records.
The use of medication records is
most widespread for older persons.
While only 30 percent of respondents
use medical records for 18-to-40-year-
olds, 85 percent pursue pharmacy data
for age 65 and older.
