Medical identity thieves are a hazard to your health

Identity thieves pilfer your Social Security number or other personal information and then take advantage of your privacy for personal gain. A disturbing segment of identity theft is medical identity theft.

Roughly half a million Americans have been victimized by medical identity theft, according to the World Privacy Forum. According to research firm the Ponemon Institute, the average medical identity theft case costs nearly $21,000 to resolve.

What is medical identity theft?

Medical identity thieves are after insurance payouts, according to the Coalition Against Insurance Fraud. Someone (a medical facility employee or a hacker, for example) gets hold of your health insurance policy number and Social Security number. That information then is sold, often on the black market.

In some cases, a thief might use your health insurance to buy addictive prescription drugs, like Ritalin or oxycodone, or use your plan to get free medical treatment. Sometimes, groups of crooks will establish fake clinics and use your health insurance policy to file claims with your insurance company.

How can medical identity theft hurt you?

If a thief maxes out your insurance, you could lose your coverage. At the very least, extra claims can lead to higher premiums or make it harder for you to get health insurance in the future.

Medical identity theft also can destroy your credit record when you get billed for medical procedures that you don't even know about, according to the Federal Trade Commission (FTC). When those bills don't get paid, you're left with endless headaches like bill collections, higher loan costs and even problems finding employment.

Medical identity theft also can mess up your medical records, which can be potentially fatal, according to the Coalition Against Insurance Fraud. For instance, a thief posing as you gets treatment at a hospital. The thief has a different blood type than you do. The hospital records this blood type as "your" blood type in your records.

How can you protect yourself?

First of all, don't ignore the problem. The Ponemon Institute found that nearly half of medical identity theft victims fail to report the crime.

Here are some tips for protecting your privacy, courtesy of the Coalition Against Insurance Fraud:

  • Look over the explanation of benefits (EOB) that your insurance provider sends in the mail. If you notice any services you never received, that should be a red flag.
  • Once a year, go over the benefits that your insurer paid out.
  • Ask your physician or hospital for a copy of your medical records.
  • Shred documents that contain your Social Security and health insurance numbers.
  • Verify the identities of any health care professionals before providing personal information. Many thieves pose as physicians or insurance providers.

If you suspect that you've been a victim of medical identity theft, contact the FTC and submit a report to your local police department.