Medical Identity Theft: What it is and How to Protect Yourself

While it's the fastest-growing type of identity theft, a new Nationwide Insurance survey reveals few people know what medical identity theft is or how devastating it can be to your credit and your health.

The national telephone survey commissioned by Nationwide Insurance was conducted by Harris Interactive in February among 2,001 adults with health insurance. It found only 1 in 6 (15%) of insured adults say they are familiar with medical identity theft. Of that 15% only one in three (38 percent) could correctly define "medical identity."

"A stolen medical identity has a $50 street value -- whereas a stolen social security number, on the other hand, only sells for $1*," said Kirk Herath, Nationwide Chief Privacy Officer. "However, while most people are very careful with their social security number to protect their credit and personal information, they tend to be less careful when it comes to their medical information."

What is "Medical Identify Theft?"

Medical ID theft occurs when one person steals another's medical information to obtain or pay for health care treatment. It's a crime that can have a serious impact on your personal, financial and medical well being.

According to the World Privacy Foundation, medical identity theft has affected 1.5 million Americans at a cost of more than $30 billion.

If someone steals your medical information they illegally can use your health care insurance to obtain medical care, buy prescription drugs or submit false insurance claims in your name, all of which can lead to devastating financial results or potentially hazardous changes to your medical records.

The three most common ways your medical identity could be compromised are:

-- Financial medical identity theft -- Someone is getting medical help using your name and/or other information.

-- Criminal medical identity theft -- You are being held responsible for the actions of another's criminal behavior.

-- Government benefit fraud -- Your medical benefits are being used by another person.

Devastating Consequences, Difficult Recovery

According to a Nationwide Insurance survey, more than half (56%) of insured adults said it's likely that their credit card or credit card number would be stolen, while only one-third (32%) say they expect their medical identification to be stolen.

About one in five (22%) believe the most likely consequence would be that their health insurance could be cancelled, when in reality hazardous changes could be made to their medical records compromising their health.

"These are warning signs that should not be ignored," Herath said. "The cost and time associated with cleaning up a medical account is sizeable."

The personal expense of resolving a medical identity theft is about $20,000, according to actual victims. The same victims also said they had spent four to six months resolving the theft**.

More than half of the study participants underestimated how long it would take to restore their medical identity. Nineteen percent or about 1 in 5 said it would take less than two weeks. And more than half underestimated or didn't know how much it would cost.

When it comes to taking proactive measures to review their medical records for errors, 75 percent or 3 of 4 study participants "trust" that their medical records are correct.

"Blind faith in a medical record is risky behavior," Herath said. "Nationwide Insurance recommends being as knowledgeable about your medical records as you are about your financial reports."

Tips to protect your Medical Identity

Here are a few things you can do to safeguard your medical identity:

-- Closely monitor any "Explanation of Benefits" sent by health insurers

-- Pro-actively request a listing of benefits from your health insurers

-- Request a copy of current medical files from each health care provider

-- If you are victim, file a police report

-- Correct erroneous and false information in your file

-- Keep an eye on your credit report

-- Request an accounting of disclosures