Life insurance carriers are always looking for ways to improve their mortality experience in a cost-efficient manner. This requires a careful
allocation of limited resources. One recent development that has been gaining traction in the underwriting of life insurance
is the use of prescription database checks, or Rx checks.
Pharmacies and pharmacy benefit managers (PBMs) have information about consumer prescription histories. Some of this information is available to life insurance carriers with a signed authorization from the proposed insured. Since not all pharmacies or PBMs share information, not all consumer information is available to insurance carriers, even with an authorization. Therefore, an Rx check that comes up blank does not necessarily mean the client has not been prescribed medication recently. And, an Rx check that shows prescribed
medication is not assumed to be a definitive list. Nevertheless, the Rx check offers an underwriter credible reassurance similar to motor vehicle records and Medical Information Bureau reports.
Any information received by life insurance carriers is used in conjunction with other underwriting information to “triage” incoming
applications. Like busy hospital emergency rooms that must allocate and manage care based on need, busy life insurance underwriting departments must decide which applications need more comprehensive underwriting and which need less. An Rx check is one tool that helps in this sorting.
Rx checks include information on medications that have been prescribed to the proposed insured and can help in a number of ways. Life insurance underwriters expect full disclosure, and Rx checks help in this regard. They not only provide information about medications prescribed, but they also provide the names and locations of the prescribing physician(s). This information can then be checked
against the admissions on the insurance application
Rx checks help underwriters assess compliance and make helpful inferences about health. If the Rx check shows a prescribed medication that is not listed on the application, the underwriter will have an opportunity to question the insured. Prescribed medications are expected to be taken, and to be taken correctly. Non-compliance can significantly impact an underwriting decision.
Not all medications are alike. Some are more potent than others and represent greater health risks; conversely, some medications may suggest relatively mild histories. The ability to identify the types of medications and dosages may allow underwriters to move to their final decisions more quickly without the need for medical records, saving time and money.
Rx checks can also benefit the insureds. Carriers may consider crediting clients simply for being on prescription health plans. Any savings
generated from the utilization of these checks may be passed on to consumers in the form of even more competitive product pricing in the future.
Rx check ordering guidelines will differ. Carriers that utilize Rx checks may consider doing them on every case or only on select cases where they feel it’s appropriate, such as when clients report no primary care doctors, at certain ages and face amounts of coverage, or even on simplified-issue business. The ultimate goal of the Rx check is to improve mortality assessment
in a cost-efficient way.