Ask HN: What prevents health insurance companies from innovating more?

2 points by immichaelwang 3 years ago | 3 comments

Hi HN,

I'm an engineer building a product in the health insurance space that in theory will allow more accurate pricing of premiums based off of individual data from wearables. My question is why haven't health insurance companies built this already? It seems like many companies already went in this direction with their 10,000 step program, but they stoped right there. Why not go further?

Does anyone know of prior attempts? Anecdotally, I've Oscar attempting to do something like "hey, runners get X% discount" and so lots of runners sign up who also happen to be at risk of some kind of cancer and then they got blown up by the tails. Anyone else heard similar things? Thanks!

PaulHoule 3 years ago |

I'm not sure if statistically modelling risks really works. If one thing doesn't get you, then something else does. For instance they still say exercise is good for your heart but if you train for two hours a day you are at risk for A-Fib

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5135187/

For one thing many health risks take 20+ years to develop but you usually contract for health insurance for a year. By the time a health risk develops you will probably be with another insurance company, or your health insurance company will have been bought by another insurance company and then bought again and then bought again.

toast0 3 years ago |

If they're participating in the health care exchanges, they have a very limited set of criteria they can use to set pricing on the exchange (I believe it's just age and smoking status; sex is now a prohibited criteria, as are pre-existing conditions). I don't know if employer based healthcare can charge differential pricing based on whatever.

AFAIK, the fitness programs were based around many large employers running their healthcare insurance on a self-insured basis (often with an insurance company handling adminstration of the plan), and there's an expectation that increased fitness will decrease costs. Since the employer is paying the actual costs, decreasing them shows up in the bottom line; and incentivizing employees to do the fitness program might make sense. OTOH, some sort of requirement to wear a device to set an employee's healthcare premium sounds invasive, but I dunno.

stop50 3 years ago |

Unless it starts to cost them money, they won't inovate. If they for example start to be limited of denying coverage, they have to bring their customers to live more healthy. Currently denying coverage is an gold mine for us insurers.