Insurance companies could do themselves and their policy holders a lot of good by trying to ensure health as well as insure it.
These ideas apply equally to health insurance and life insurance, and are focused on ways to reduce the costs of funding insurance for the company while improving the policy purchasers health at the same time. A lot of health costs could be prevented, and if they’re prevented then health insurance companies save the money of paying out, and life insurance companies continue to collect premiums longer. So it’s worth it for these companies to spend some money to keep us healthy in the first place.
For example, it would be in the best interest of health and life insurance companies to lobby for a tax on unhealthy food. There’s already been talk about this from nutritionists, but they don’t have the monolithic financial backing to push for it that insurance companies have. That would require cooperation between competing companies because a tax on junk food helps all the companies and not just the ones paying to make it happen, so it would cheap and effective but not so great for any individual company.
There are some incentives that could only be offered to policy holders of participating companies though. What about fitness, swimming, saftety, food-safe, and first-aid classes with a for-profit or break-even price to join for people that are not policy holders and a discount for those that are. What about a discount card for participating grocery stores for healthful food like fresh vegetables that only policy holders had? How about a coupon deal with participating healthful fast-food franchises like Booster Juice and Subway?
This is doubly effective in reducing financial risks from health and life insurance: First, it encourages current policyholders to live a more healthy lifestyle and therefore live longer and pay into the policy longer before making a claim with a hospital or funeral bill. Policies like this are more attractive to people that already live healthier than average lifestyles, and would be willing to either pick up a policy or switch policies when they wouldn’t have before because of the added incentive of savings to their lifestyle. Bringing someone into your policy who’s already living healthy may result in a larger risk reduction than making someone already in your policy more healthy, so this might be a major selling point or focus of such a program.
If it works well, other companies might do the same and the companies that don’t will be left insuring the high-risk people with less incentive to eat better and exercise. There would be a competition between companies to make their policyholders the healthiest and therefore save the most money.
Furthermore, the cost to the insurance company for promoting other companies through coupons and specific discounts could be quite small if the insurance companies shopped around for retailers willing to chip in for a portion of the cost. The incentives would also be a fair excuse to increase premiums slightly to cover the incentives ($50/year increase for a potential $300 savings?)
We live longer and better, and they save a lot of money, at cost of insurance companies interfering with us via discounts for things we should be involved in anyway. People don’t want to be controlled by their insurance companies, but how invasive are discounts?