The US health insurance industry is much maligned, and often deservedly so. The shady dealings and rampant abuses of power have been widely reported, and you’d be hard pressed to find anyone with a positive thing to say. One could, therefore, be forgiven for being skeptical about how they intend to use wearable technology to set premiums, and whether they are responsible enough to use the data for the benefit of customers.
Today, the average American’s health insurance payments change only once a year. However, devices such as Fitbit and Jawbone regularly measure metrics around your physical health in such a way that could be used to make the process far more fluid. The data produced could, feasibly, be used to change the rate as often as once a day. These devices come with powerful sensors that can track how many steps and how much exercise you’ve done, the length and quality of your sleep, stress levels, blood pressure, exposure to the sun, and glucose levels - everything you need to get a full picture of someone’s health.
A number of insurance companies are already creating products that encourage the use of wearable devices under the guise of lowering costs. UnitedHealthcare, the second-largest US health insurer, recently announced its UnitedHealthcare Motion program, alongside tech giant Qualcomm, which is aimed at boosting physical fitness and reducing health insurance costs for employers and employees. It rewards customers for increasing exercise with $1.50 toward your health insurance, and can save customers up to $1,460 annually if they increase their activity levels.
Employers are also incorporating wearables into their corporate wellness programs in a bid to lower their insurance bills - something Fitbit and Jawbone are actively encouraging. US retail giant Target announced last year that it was offering free or discounted Fitbit trackers to its more than 300,000 employees. Health services firm Vitality Group similarly provides its employees with an Apple Watch for just $25, a fraction of the retail cost, although they must earn the device by completing workouts and gym visits each month.
There are many legitimate concerns about where this is going; the loss of privacy, for starters. Potentially every health infraction could end up increasing your health premium, and there are real concerns about the insights companies could gain into your personal life. While employers and insurers should comply with US privacy regulations so that health data cannot be seen or used by employers, not all employee wellness programs and the data collected are necessarily protected under federal privacy law.
There is also the question of how accurate fitness trackers actually are. Testing of how accurately devices measured energy expenditures by researchers at Iowa State University found that the accuracy of eight activity trackers was off by as much as 15% when compared to a precise laboratory measurement, with the highest being off by 23.5%. More worryingly, three people filed a class-action lawsuit against Fitbit earlier in 2016 alleging that the company’s PurePulse Trackers was giving inaccurate readings for their heart rates. One claimant said that her tracker recorded her heart rate at 82 beats per minute, though a follow-up check by a personal trainer later found it to be 160 beats per minute.
Fitbit has vigorously denied these claims, and privacy concerns are, of course, balanced out by the benefits for people’s personal health and the high likelihood that it should encourage people to be fitter. According to the latest IDC survey, sales of wearable tech devices rose almost 200% in the third quarter of last year to 21 million units, and other surveys suggest that as many as 20% of Americans now use a fitness tracker. The widespread use of wearable trackers and what they can tell you about people’s health mean that, really, insurance companies would be remiss if they weren’t using all the data they generate as a resource to set premiums. However, it needs to be carefully navigated moving forward.