Finally, A Health Insurance Company That Rewards Healthy Choices

Insurance companies for years have done a nice job penalizing customers who make bad health choices, as in excessive eating, drinking and especially smoking. That has changed slightly under the new insurance plans sold here in the U.S. due to the new health care laws, but for years the penalty was higher premiums if a customer had pre-existing conditions tied to bad health habits.

From a business perspective, this made perfect sense. Fundamentally, insurers are really not that different from other businesses—it is always easier, and maybe the logical financial choice in the short term, to penalize rather than reward. But for those of us who eat right, avoid tobacco, spend some of our free time exercising, and make other positive health choices, it often does feel as if we are subsidizing others for their poorly thought out life choices. Oscar Insurance, a New York-based start-up, is trying to change to transform the health insurance industry by encouraging healthy decisions. And if their business model pans out, they could become quite profitable.

For now the key for Oscar Insurance is to encourage its customers to move. Buoyed by medical research that suggests walking about 10,000 steps a day is one of the best ways to keep off the weight and ward off health problems including high blood pressure, members of the company’s insurance plans have an incentive to get healthy.

Customers can download an app monitoring their daily steps and can receive a Misfit Flash Fitness Tracker wristband in the mail that syncs once it is put on. Every day, that customer can score $1 for reaching his or her goal. Oscar Insurance promises their members they can score up to $240 annually—not a bad sum for something we all should be doing anyway. For someone whose exercise routine does not extend much farther than walking from the sofa to the fridge, this program can be tailored individually—after all, the worst way to start an exercise regimen is to set unrealistic goals right away. Start off with a thousand or so steps and move upward.

Oscar Insurance plans other benefits to for those who are proactive about their health. Free check-ups, generic drugs and flu shots are also on offer. For those who want to do more than walking, the company also offers incentives for those who belong to the gym or indulge in yoga. Such moves are certainly going against the grain in this sector—one long standing critique of the U.S. health system is that it is more of a sickness management system than one that encourages smart and healthy decisions. Encouraging members to take their health into their own hands can only lower costs in the long run—preventive screenings and exercise can keep us out of the doctor’s office, for which is what a profitable health care company should aim, and aim highly.

A quick quote shows Oscar Insurances plans are comparable to similar plans in New York. Bronze plans with higher co-pays and deductibles start at $342 for a man in his, ahem, prime, while a platinum plan with a $1,000 maximum patient spend is $572—those rates are without Affordable Care Act premiums.

For those of us in California whose choices only include Blue Cross and Kaiser, the question we have on the Left Coast is: when is Oscar Insurance venturing out west?

Image credit:Misfit.com

After a year in the Middle East and Latin America, Leon Kaye is based in California again. Follow him on Instagram and Twitter. Other thoughts of his are on his site, greengopost.com.