That trendy fitness band. Your last food order from your smartphone. Both innocuous parts of everyday living. But these could soon have a very significant bearing on your life and wallet in a way you may never have imagined—the cost of your health insurance. Yes, in a twist that seems straight out of the Sci-Fi TV series Black Mirror, your insurance premiums could be directly affected by data you would otherwise consider private and unrelated.
As Orwellian as this may sound, it comes in response to a very basic reality. Insurers in India suffer from a lack of patient oversight once a policy is sold; the consequence of not having a health data repository. Many health providers, both private and public, don’t have electronic health records (EHR)—a digital record of patient information such as hospital bills, diagnosis reports, health history, etc.
In the absence of this, traditional insurers such as MaxBupa, Aditya Birla, and others have decided to get creative. They’re looking at other avenues that may help them paint a more complete picture of people’s health. Healthcare providers, diagnostic clinics, wearables, digital healthcare platforms. Literally, anywhere, because, say policy experts, there’s nothing to stop them from doing so. Theoretically, they could even reach out to food delivery platforms to map your food ordering habits.
Max Bupa and Aditya Birla Health Insurance have already put out detailed policy documents outlining their plans. Both documents show how insurers intend to categorise insurance holders by using a mix of health data mined from wearables like fitness bands, physical health records, and diagnosis reports. This data, the documents indicate, will help bring to light the true risk that insurance holders pose to insurers.
According to Aditya Birla’s policy document, policyholders can be categorised as Red, Amber, and Green. Red is for people who have the highest chances of heart disease. Those in the minimal-risk Green category could get as much as a 30% discount on their final premium, while those in the Red category may not be eligible for a discount at all. This would mean that while the insurer doesn’t raise premium rates, less healthy policyholders would effectively end up paying more than their fitter counterparts.
From a business standpoint, this seems like a logical progression. From a consumer point of view, however, things are markedly less straightforward. To understand why we need only look at the banking sector from five-six years ago. Fintech companies had emerged, disrupting the payments space. This forced the RBI to carve out a separate framework for e-wallet companies—from payment processing (PPI licenses) to customer onboarding (KYC regulations). When it comes to insurance though, the Insurance Regulation and Development Authority of India (IRDAI) doesn’t seem likely to go the RBI way.
