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The Truth About Private Insurance Plans Disrupting Health Insurance

Long gone are the days of straightforward healthcare. Older generations saw the same family physician for decades, medication was typically priced affordably, and health insurance may not have even been a blip on their radar for much of their lives. Things are different in 2019. Nearly everything regarding how we manage our health is dramatically different, both for better and worse.

Insurance probably tops the list of what most Americans are thinking about when it comes to healthcare. Whether you’re fortunate enough to have coverage through your employer, or you worry about staying healthy because you can’t afford a plan, these policies affect how we choose to stay healthy. The difference between opting for a high-calorie meal or choosing a side salad may very well depend on the insurance we have.

Individual policies have undergone a wide range of changes in recent years due to adjustments within our current political administration, but experts are predicting that 2019 will show an even larger shift in the way that private plans are administered. As technology becomes more and more intertwined with healthcare, it’s believed that between 5% and 10% of insurance plans offered this year will be linked to individual health data. What exactly does that mean for you, your premiums, and your level of coverage? Let’s explore how these private policies are shaking up health insurance as we know it.

 

The Current Landscape

It’s important to understand the current state of private insurance in order to more properly realize how much things are about to change in the near future. Unless you’re on a government-funded plan, you either have no insurance at all or are enrolled in a private plan, either individually or through your employer. Most individuals are covered, as data from the Centers for Disease Control and Prevention found that in 2017, nearly 70% of people surveyed between the ages of 18 and 64 had coverage through this type of policy.

A wide range of services are usually covered under these policies, with some preventative care options available at no charge to you. Others include hospital coverage, payment toward lab testing, and a host of other benefits. Depending on your specific plan, you could have an HMO, PPO, or another option that dictates what your deductibles and reimbursement rates are. There’s a plethora of policies in the market and it’s wise to educate yourself on the general details of each plan, including set fees and working off of the idea of pooling people together to absorb risk.

 

What to Consider

There are several things to consider when selecting a private healthcare plan, although much of what affects the criteria may change throughout the year. First and foremost, it seems as if individuals have one of two priorities at the top of their list: cost or coverage. Those who have the need for robust medical care, including individuals with chronic health conditions or families with younger children, may not put as much weight into the cost of their policy and instead seek certainty in being covered no matter what happens.

On the other hand, some might want to ensure they’ll have medical coverage in the event of a major emergency, but don’t care as much when it comes to more routine visits or care. In this case, a cheaper month-to-month payment coupled with a higher deductible might be the right choice. Your options could be quite flexible, or you could be left with a sparse selection of options—it all depends on your income and whether your plan is offered through an employer or not.

Experts often recommend looking at the big picture when it comes to selecting your policy, as more than just cost or coverage should be considered. Selecting a plan with a network of providers that you trust is important, as is doing your due diligence to learn what the coverages are for items like prescriptions or mental health services. As policies are about to slowly begin shifting toward more customized options, how much of an impact will these things really have?

 

Digital And Health-Based Insurance

There’s a wide range of tools and devices available to help maintain one’s well-being, many of them just a benefit of the rapid advancement in technology being put to good use. Sure, knowing what your heart rate is during a run or logging how many steps you’ve walked in one day is worth it, but what if your overall health could help you pay less for insurance?

That’s the idea behind some of the up and coming private health insurance plans making their way to the market. It seems as if the United States is catching up to others across the globe, as one Canadian company has been working toward this idea for decades. Insurance holding group John Hancock will be partnering with and underwriting policies using the Vitality platform, a system of wearable devices and tracking metrics.

If you’re not excited at the idea of your insurance company knowing how often you do or don’t exercise, you may want to think again. With Vitality specifically, users are able to earn rewards for good health, including benefits for eating well or seeing their doctor. Statistics show that these policyholders enjoy up to 30% lower hospitalization costs and, on average, live between 13 and 21 years longer than the rest of insured individuals.

 

More Than A Doctor Visit

Skeptics might be concerned about sharing their data with large companies in an effort to lower their healthcare costs, but John Hancock has been utilizing this model with their life insurance policies long before rolling out the idea to this new market. While customers are allowed to decline the use of smart devices to track their health habits, it’s been shown to make a difference when it comes to policy cost.

Ultimately, that idea is the crux of this health insurance shake up. Interactive policies allow companies to partner with individuals who will be less of a risk and also helps to incentivize those who may be on the fence about their health. Critics of this type of practice note that in most instances, the ones using these devices will be of a certain age and income bracket, which may automatically mean they are healthier due to greater access to healthcare and financial stability.

Additionally, the concept of sharing health data with others is always a hot button topic, one that is certainly relevant within this discussion. In general, the concept of customizing an insurance plan for your specific health needs sounds great, but there’s also a bit of a “Big Brother” element that cannot be ignored. Unless safeguards are put into place to ensure the data collected is accurate, there’s no telling who could wear your device and report their own information as yours.

 

Changes On The Horizon

Like most other concepts that include the sophisticated use of technology, the idea of data-driven health insurance plans will likely need some fine-tuning as time progresses. However, the idea as a whole seems to be catching on rather quickly. As of December 2017, Researchscape International found in their survey that 51% of Americans are already using one of these wearables. Their findings go on to report that active people already want to know more about their health, so the information collected by these devices are viewed in high regard.

Only time will tell if these private insurance plans are really going to rival the other established options within the HealthCare Marketplace, and how successful they become may be open for interpretation. Is the benchmark going to examine how much money policyholders are saving on their premiums or how much the insurance company saves in reduced payouts? Will increased engagement with one’s primary care physician be the true test of just how well these policies work? Until more individuals enroll in this type of plan, a lot of the variables are still unclear.

One thing is certain—the landscape of health insurance is already complex enough, so companies should focus on making these options as easy to navigate as possible. If they offer a true benefit through customized digital options, then the rewards need to clearly outweigh the risks. Would you utilize a plan like this? It’s something to think about for the near future as these policies become more and more commonplace.
 

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About Slingshot Health

Slingshot Health is a health tech startup that brings top healthcare providers and patients together. Patients bid on the cost of services and healthcare providers accept bids based on availability. Slingshot Health is unique in that it is a mutual marketplace putting both patients and providers back in control. Visit us at slingshothealth.com.