If people get healthier, is it good or bad for health insurance companies?
While they will have fewer claims to settle, people might actually buy less insurance since the likelihood of hospitalization will reduce.
The insurance ecosystem is a paradox — the healthy people pay for the ones who fall sick and claim big bills. That’s how risk pooling works. If you work hard to stay fit, you might feel cheated for paying hefty annual premiums – although it brings peace of mind.
What if there’s an insurance company that emerges and starts offering coverages to healthy folks for half the cost?
For instance, they can say — if you take 10K steps daily, sleep for 8 hours, and burn 350 calories, you pay a lower premium. This may lead to better lifestyles and, moreover, align with the growing emphasis on preventive healthcare.
But we’ve got challenges. Verifying people’s adherence to healthy behaviors can be tricky. And, there may be concerns about privacy and the potential for individuals to manipulate data to qualify for lower premiums.
Additionally, while some might appreciate the opportunity for reduced premiums, others might find it discriminatory or intrusive.
Just food for thought 🙂
Parth Choudhury 