Would You Do This to Save on Health Insurance?

Imagine if walking an extra kilometre every day bought you a half-price trip to Bali at the end of the month. Or if losing five kilograms gave you gold-class movie tickets.

Sounds great, right?

Well, if you think this would never happen in a million years, think again. Real health insurance companies are using these strategies to entice customers into buying their policies.

By improving your health and quality of life through regular exercise, you’re promised cheaper premiums and some nice little rewards on the side.

And it makes sense.

If you’re an obese, pack-a-day smoker with a bunch of health problems, you get slapped with higher premiums.

You pose a bigger risk for yourself…and their profits.

So, it only follows that clean-eating, active, health-conscious citizens are rewarded for their ‘good’ behaviours.

After all, it’s in the interests of the company to decrease the risk they’ll need to ever pay out. Incentivising healthier behaviours could achieve that.

It looks like a win-win situation, really. By getting fit, you reap financial rewards.

The result? A healthier and happier you.

But is this new scheme as innocent as it seems?

Maybe not…

How can insurance companies measure this?

One of the main concerns is how the insurance companies plan to get their hands on your health data.

Can you figure it out?

One word: wearables.

For some, the idea of big businesses monitoring you through use of a FitBit or similar wearable electronic device is a bit Orwellian…

Do we really want to be constantly ‘watched’? Who, in the event of an emergency, are we beholden to?

Someone who knows how many hours we slept last night? Or what time we went to the gym?

Another potential problem is that disadvantaged groups might be left in the dark. These people are often at a greater risk of health issues and may be left unable to afford health insurance.

We all know that diabetes and other health issues are not always due to poor lifestyle choices. They can be caused by genetic or socioeconomic situations.

Is it fair for those customers to be excluded from reward schemes? Or punished with higher premiums — especially when they’re most likely to be unable to afford them?

A third problem is that corporations may soon be able to listen to our heart rates. Or track our sleep patterns. Or even monitor our dietary choices!

‘Beep, beep, beep…no more chocolate, Mr Dinse…’

While this new type of policy makes sense for the insurance companies, it could leave us at the mercy of a new and very scary ‘Big Brother’.

We might begin to adapt our behaviours into a new uniform ‘world of wellness’.

Sounds kind of spooky, right?

Well, it’s coming anyway…

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Qantas Health Insurance (NIB), MLC and AIA are among the Australian companies who have already begun to offer financial rewards for active Australians.

Even FitBit has recently launched an app that makes your data from wearables available to doctors and insurers.

Meanwhile in the US, the situation looks even more dystopian.

US-based health insurance giant, John Hancock has recently announced their ‘Vitality’ program. It essentially forces customers who refuse to use their wearables to pay higher premiums.  

But is this what Australia needs?

Currently, nearly 30% of all Australians are obese.

That’s right. Not just overweight. Obese.

Every single day, about 280 Australians are diagnosed with Type 2 Diabetes.

These numbers don’t appear to be lowering anytime soon. But they could be reversed if more Australians adjusted their lifestyles.

For the active and healthy among us (or even just the aspiring), cheaper premiums may be a welcome incentive for good behaviour.

All of this could create a better future for our kids and a healthier, happier nation.

For example, the folks behind the Vitality program in the US claim users of its ‘behaviour change platform’ live 13–21 years longer than the rest of the population and generate lower hospitalisation costs.

But Suneel Jethani, a University of Melbourne academic who recently submitted a PhD on wearables and big data, has questioned the security of our data in the hands of insurance companies.

How do we know how companies will use our data? Will vulnerable groups in society be preyed on?

If the recent royal commission into banking and insurance is anything to go by, putting faith in the honesty of big corporations seems like a dumb move.

The fight against big data

Tech geniuses are already seeing holes in this sort of policy.

There is an art project called Unfit Bits which provides products for tricking your wearable into believing that you have engaged in physical activity.

The Desktop Stepper Smoker’s Edition, for example, is a pendulum which you can hang from your fitness tracker to let it register steps!

The project even has a guide, which details strategies on how to hack your fitness trackers. It tells you to ‘free your fitness data from yourself’.

At the end of the day, those of us who’ve taken the plunge into the complicated world of health insurance know it can be overwhelming.

There’s a dizzying array of companies trying to push sales deals down our throats. Then there’s the call-backs. The weird super personal health questions.

But when it comes to insurance, all we want is to know that our lives (and our family’s lives) are protected.

If corporations need to watch us closely after the sign-up process, then perhaps it’s a sign that this trust has been severed.

I look forward to seeing how this story plays out, particularly with projects like Unfit Bits coming onto the scene.

Don’t get me wrong — I believe in healthy living, but only if I’m in the driver’s seat. And I think there’s a way to turn the nation’s health issues around without kicking the little guys.

Investing in the stocks that give power back to the consumer is, in my opinion, a far more ethical and lucrative endeavour.

Good investing,

Ryan Dinse,
Contributing editor, Markets & Money

PS: To check out Unfit Bits’ guide, click here.

Ryan Dinse is an analyst at Markets and Money. He has two decades of experience in financial planning, equity analysis and credit markets. Ryan combines fundamental, technical and economic analysis to identify and invest in good ideas at the appropriate stage of the economic cycle. He has a strong interest in technology, economic history and disruptive business models. His focus at the moment is as lead analyst on two of our most recent and innovative investor services, Crash Market Investor and Sam Volkering’s Secret Crypto Network. He will write about the exciting opportunities for investors to benefit from significant changes in world markets. He is a member of Fintech Australia, a former member of the Digital Currency Council, and is a fully accredited financial adviser.

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