VARs Could Help Control Health Insurance Costs — If Regulations Keep Up With Tech Advances

Laws and regulations frequently lag behind technology in most sectors, and, according to an article from Smart Data Collective, the world of health insurance is no different.

Wearables Impact Insurance

Apple’s recent HealthKit announcement shook the world of health wearables. The ever-innovating company took it one step further in September, and announced its partnership with Humana, through their Humana Vitality app. The partnership ultimately means that Humana-enrolled users of HealthKit will be able to receive discounts on their healthcare premiums depending on their health-related behavior. The coordination between the two companies could mean a new era in cost benefit being passed on to patients through the use of biometric data.

However, if regulations don’t keep up with new technology, progress in this area will be slowed.

Regulations Lag Behind

As regulations stand now, healthcare data must meet the guidelines that qualify it as an employee wellness program to impact health insurance prices. Additionally, that impact is limited to a 30 percent discount.

According to article author Joshua New, a “more modern framework” is needed.

Employers and insurance companies have been incentivizing healthier lifestyle choices for a while now — companies collect data from wearable devices, and some even invest in kiosks and telemedicine to make medical visits more convenient.

Impact On Public Health

It’s also quite widely known (as evidenced in this survey of 900 adults) that the majority of adults find the promise of lower insurance premiums an incentive to use wearable fitness-tracking devices. This could go a long way in addressing the 80 percent of U.S. adults who don’t get enough exercise, as well as collecting huge amounts of high-quality data that could be used to further incentivize and provide insight into healthful behavior.

Beyond that, a higher quality and quantity of healthcare data means that insurers and agencies like the CDC could benefit from deeper insight into public health. PHI (protected health information) could easily be stripped to address any privacy concerns that arose. New takes the position that “policy makers should promote widespread access to wearables to help ensure that all Americans can take advantage of the related reduction of healthcare costs.”

For Insurance Clients

For your insurance clients, the world of wearable provides an opportunity for them to get on top of cost reduction through proven methods like mobile app development and data analytics. Google has released its API for developers, meaning that taking advantage of the growth in wearables isn’t only limited to major players like Humana.

According to New, “Regulators and insurers must work together to pilot a system that allows data from wearables to set prices as actuarial models deem fit, without arbitrary limits on how much prices can vary. Large pilot groups would help insurers build models of how to price insurance accurately according to an individual’s behavior. Regulators could monitor that same data to prevent discriminatory or unfair price adjustments and structure regulations accordingly. It’s critical that they establish a regulatory framework that lets insurers explore the full potential of this new technology and lets consumers reap the benefits.”