Protect yourself from medical identity theft RANDY HUTCHINSON Resolving financial identity theft is a hassle, but can usually be accomplished at little cost to the victim and with no lasting impact. Medical identity theft is far more difficult to recover from, can cost victims a lot of money, and could have a disastrous impact on their lives. Medical identity theft occurs when someone uses your personal information to submit fraudulent claims to Medicare or another health insurer. For example: Someone uses your information to obtain medical procedures with the bill sent to your insurer. Someone uses your information to buy medical equipment or prescription drugs.