In the proliferation of personal health data, all roads lead to dystopia.
John Hancock will no longer sell traditional life insurance policies - but only ‘interactive’ policies that encourage the sharing of health data.
This is another step towards resetting the norm of what information is shared.
Backstory
In April 2018 I wrote about the anticipate hazard that genome sequencing will become mandatory. Currently genome sequencing is voluntary, but for how long?
One pathway proposed is that ‘optional’ employee wellness programs can move from being optional to effectively mandatory by having very high rates for those who fail to participate.
I also cited concerns regarding Bill H.R. 1313 “Preserving Employee Wellness Programs Act” introduced in the United States in 2017 that allows insurance companies to provide different insurance packages depending if employees participate in “employee wellness programs”
The concern is that ‘wellness programs’ could move to include genomic data as part of their client profiles. It would be voluntary of course…but if you do not comply, your fees would be markedly higher.
John Hancock Insurance: ‘Interactive Programs’ Now Mandatory
Since 2015 John Hancock’s Vitality program has allowed participants to enrol in an optional program that includes submission of activity data. Those who participate receive discounts at places like Amazon, flights, hotels, as well as lower insurance rates.
The program accepts data either from Fitbit or Apple Watch. They also offer these products at a steep discount to users who agree to sharing their information.
The purpose of the program to help encourage healthier living. This sounds good at face value.
New news this week (Sept 2018) from John Hancock is that they will no longer provide standard insurance plans, and instead only sell ‘interactive policies’.
Vox notes that the Vitality program, “sounds a little bit like a mash-up of store loyalty points and the Hunger Games”.
Ultimately such programs have the potential to create adverse user selection and greatly influence risk pools.
The future?
John Hancock is a major insurance provider and a 156-year old company. I suspect others will follow their lead in this. Ultimately, the insurance industry does need innovation, and people do need incentives to become more active. Innovation in this area is good.
The question to address is how will our actions today lead to unanticipated consequences in the future? It is too easy to exchange privacy for cash. Companies currently (and will continue to) take advantage of this.
Citizens in cushy western democracies are too willing to exchange privacy for money; they do not appreciate its benefits. Of course, until its too late.
A year ago I was talking with a founder about potential startups precisely in this area of rewarding employees for health with reduced insurance rates. Security and privacy of this data were a significant concerns raised. It is also unclear the interaction in the United States between employees (who pay for insurance) and the relationship to their employees who may, or may not, share health information.
I essentially see the risk pool dramatically splitting - between those people who are able to exercise and be active (and benefit from low insurance plans) and those who either by choice, circumstances, or underlying medical condition are unable to do so (and have high insurance plans). This ultimately moves towards a more unbalanced risk pool.
About Vitality
Vitality is based out of South Africa. It claims to be the largest wellness program in the world, with over 2 million South Africans and 17 million members worldwide.
As you can see from this advertisement, it is targeting a very particular demographic…
References
Strap on the Fitbit: John Hancock to sell only interactive life insurance" - Routers Suzanne Barlyn
A life insurance company wants to track your fitness data - Vox, Charyl Wischhover
Life Insurance Offering More Incentive to Live Longer - The New York Times, Paul Sullivan