A so-called "navigator" recently informed a Florida news outlet that insurers who provide individuals' coverage through the health exchanges use credit scoring in order to determine premiums. But she has since recanted that statement.
According to Click Orlando, health navigator Anne Packham told the news source that those who purchased coverage through the insurance exchange – an option for people who don't have employee benefits – typically have their credit checked by participating insurers. However, when a representative for the U.S. Department of Health and Human Services was contacted to confirm, the assertion was denied.
"Insurers are not allowed to factor in credit scores when setting premiums and at no point in the process are peoples' scores accessed," said the HHS representative.
The news source then returned to Packham, who admitted that she may have been off-base.
"So I misspoke yesterday," said Packham. "I realize I made a mistake."
The news outlet indicated that the topic of credit reports has been in vogue since the exchanges officially opened for enrollment on Oct. 1 because many applicants have been asked to verify their identities through the credit agency Experian.
According to the Insurance Information Institute, while using credit score data is not universal among insurers, there are those that use it for underwriting purposes.
"Actuarial studies show that how a person manages his or her financial affairs, which is what an insurance score indicates, is a good predictor of insurance claims," the III stated.
Additionally, the III pointed out that, among some insurers, how people handle their credit can affect how providers establish premiums among customers. Those who have a favorable score are more likely to pay a cheaper rate than those whose score is low.
