A program is coming to the United States that will allow life insurance customers to get a discount on their payments in exchange for sharing health and wellness data with their insurer. A story in today's New York Times describes a new service soon to be offered by John Hancock Insurance via a partnership with The Vitality Group, a US subsidiary of South Africa’s Discovery Health, which has been offering a similar service for some time in South Africa.
Members will get a free Fitbit from their insurer, and will have the opportunity to earn points for different healthy behaviors -- including movement tracked by the Fitbit, which can earn members a 15 percent premium discount in addition to other perks. Other ways to earn points include regular gym visits, not smoking, and keeping blood glucose, blood pressure, and cholesterol in ideal ranges.
Of course, users of the service are free to opt out of sharing any amount of health information, but in doing so they'll give up those points and any potential discounts they could earn.
Health insurance companies have been skirting this opportunity for years. Last year, San Francisco-based Appirio talked Anthem into knocking down their premiums to the tune of $280,000 in exchange for their implementing a wellness program with Fitbits. And health insurance newcomer Oscar teamed up with Misfit to offer free activity trackers to all its users, and use those devices to offer a rewards program for being active.
If other companies follow John Hancock's lead, this initiative could signal a major shift to how life insurance companies operate. Life insurance has always been, in some sense, a business of taking bets on how long a member will live to pay into their plan before the plan has to pay out. But data tracking allows companies to proactively encourage healthy behaviors to sway that calculus in their favor.
"It changes the paradigm of life insurance,” Dr. Kevin Volpp, director of the Center for Health Incentives and Behavioral Economics at the Leonard Davis Institute, told the New York Times. “In some sense, it tries to change your insurance into less of a passive vehicle that pays the bills if something happens, into a more active vehicle to get people to lower their risk.”
The points-based program is presented as an incentive program, where members earn points to get discounts. The John Hancock program starts members out at the gold level -- the middle tier of a three-tiered system. And if their points drop too low they'll go down to the silver level and end up paying more. So some would argue that whether the system is incentive-based or punitive is a semantic distinction.
Employers have already started to experience some pushback for being on the wrong side of the incentive/disincentive divide when it comes to health and wellness tracking. One employer, Honeywell, was sued by the Equal Employment Opportunity Commission, a federal agency, over it's employee wellness program last fall.
For better or worse, it may not be too long before your health insurer, your life insurer, and your employer (not to mention your doctor, local pharmacy, and athletic apparel brand of choice) are all offering incentives and discounts in exchange for proof that you're making healthier decisions.