Fitness Tracking Technology in the Health Insurance World

Did you get your steps in today? Soon it won’t just be your workout partner asking, your insurance company may want to know as well. Some private insurance companies are implementing plans that allow clients to opt in to sharing data from their fitness-tracking device. They have your social security number, medical history, and payment information already so why not your fitness data?

Clients who opt in to fitness tracking plans have the potential to save hundreds of dollars a month on insurance rates. The savings will only apply to those who are exercising regularly. What about people who don’t want to participate? No worries, companies have said there won’t be any negative repercussions for those who opt out. So why would a large insurance company want to discount rates?

Discounting rates based on the amount of physical activity a person engages in “gamifies” exercising. This increases the odds that a client will engage in exercise. Fitness-tracking device wear alone is not enough to increase an individual’s workout habits. In one study, most sedentary office workers decreased their physical activity during the day after starting to wear a tracking device. So again, why does an insurance company care?

The answer is simple. The longer someone lives, the longer they pay insurance premiums. Not only that, but the more exercise an individual engages in, the less likely they are to need more than routine medical care. This includes prescription medications. Overall, the company earns more revenue by offering the discounted insurance rates to customers who exercise, or at least that is the hypothesis. Tricking consumers into exercising so they pay insurance premiums longer isn’t exactly diabolical and could have applications for government funded insurance and hospitals.

The American government is predicated on saving money on healthcare for the people. People using government funded healthcare start wearing fitness trackers and get a tax break based on the amount they exercise. This saves the individual money and the government. Then, the government would be able to reinvest the remainder of the budget back into the healthcare system. It wouldn’t be any different than the 340B drug-pricing plan. Passed by Congress in 1992, the 340B Drug Pricing Plan allows hospitals and clinics serving under insured and under serviced areas to obtain discounted prices on outpatient drugs. The hospitals then reinvest the money saved back into health care services. Some might argue that dolling out fitness tracking devices is a far cry from discounting pharmaceuticals. Is it really though? Many hospitals invest in 340b technologies to help with this sort of thing. The income invested on the front end is earned back many times over by the software as it prevents avoidable fines and ensures compliance with federal law.

Technology is a part of our modern lives. It’s used for everything from playing music while we go for a jog to reminding us of a business engagement from our calendar. Allowing fitness devices to share income with insurance companies is not really that great of a leap. It could turn out to be quite a profitable one.

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