Medical Identity Theft: Are You at Risk?

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Stolen health records can fetch up to $2000 on the black market.

En español | Financial identity theft may dominate the headlines, yet there's a bigger threat that goes beyond what's in your wallet or bank account. It's medical identity theft, up about 20 percent last year.

Crooks use your insurance or personal information to get treatment or medication, or to submit false billings in your name. And unlike credit card fraud — in which card issuers eat most, if not all, of the bogus charges — there are no such protections with medical identity theft.

Victims often have to pay — about 36 percent of victims in 2013 incurred out-of-pocket costs that averaged $18,660, according to research by the Ponemon Institute, which studies this particular crime. Others lose their health insurance or have to pay higher premiums to restore it. Last year, nearly half of all identity data breaches in the U.S. were medical-related.

"No doubt, stolen medical credentials are more valuable on the scammers' black market," where data is bought and sold, says Jon Ramsey, head of the Counter Threat Unit of Dell SecureWorks, a division of the computer giant.

Personal data containing everything needed to commit financial identity theft — including a person's Social Security and financial account numbers — sells for about $25 on the black market, he says.

But stolen health insurance and medical records can fetch about $2,000. The bigger potential yield — a $20,000 surgery, say — justifies the higher price.

You can't prevent things such as data breaches or employee theft. But consider these steps to spot problems and protect yourself:

• Read every letter from medical insurers and health care providers, including those that say "this is not a bill." If you see a doctor's name or treatment date that isn't familiar, speak up.

• Once a year, ask your insurers for a listing of benefits paid out in your name. Make sure everything is accurate, including your address.

• When you review your credit report at AnnualCreditReport.com, look for medical items. Contact your insurer and the three major credit reporting firms — Equifax, Experian and TransUnion — about any falsehoods.

• Guard your health insurance card and number as carefully as you would a credit card or bank account number. If you lose your wallet, immediately contact your insurance provider.

• Don't routinely carry your Medicare card, which lists your Social Security number. Make a photocopy and hide some of the number's digits.

• Ask all of your doctors to make copies of everything in your file (you may have to pay for them) so you'll have a "paper trail" if needed.

• Avoid unfamiliar health fairs or storefronts offering free screenings that require your insurance information. Hang up on phone calls promising free supplies or from "officials" asking for your particulars.

Sid Kirchheimer is the author of Scam-Proof Your Life, published by AARP Books/Sterling.

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