The Future of Health Insurance: Trends and Innovations to Watch

The insurance industry is witnessing interesting health insurance trends crop up, kickstarted by the record losses recorded by the non-life insurance segment.

American non-life insurers registered a $26.9 billion loss in 2022, six times what it was in 2021. This has necessitated introduction of innovative health insurance trends to steady the ship and drive health insurance into the future.

Technological Advancements

Telemedicine usage skyrocketed 766% within the first three months of discovering of the COVID-19 pandemic on US soil, up from 0.3% between March and June 2019.

Health insurance companies were initially reluctant to cover virtual care, but recent signs point to a change of heart. By 2021, MediCare and insurance covered 60% of respondents’ telehealth services.

Automation leveraging artificial intelligence (AI) is one of the key health insurance trends to keep an eye on. China’s ZhongAn insurance company has already implemented 95% automation for claims settlement and 99% for underwriting.

Blockchain could prove a valuable ally for insurance companies looking to enhance security and transparency in their dealings. Insurers can use the cryptographic capabilities to secure client credit card, bank account, and other sensitive details from unauthorized access.

Big Data

One of the major health insurance trends to emerge in recent times is the use of big data for processes such as risk assessment, fraud detection, streamline operations, and enhance customer experience.

Some insurers have turned to predictive analytics insurance software utilizing modeling techniques and data analysis for customer management and data driven decision-making in claims and underwriting.

AI and machine learning come in handy in automating data processing, analyzing it, identifying trends, and extracting valuable insights.

A research analysis showed embracing data analytics lead to a 60% improvement in fraud identification and 40-70% cost savings.

Value-Based Care Models

Most health insurance providers previously relied on a fee-for-service reimbursement model but recent developments have seen the industry shift toward a value-based care model.

Clients have long clamored for quality over quantity, with insurers pivoting toward offering value to customers. This saw the traditional pay-for-performance (P4P) model lose 18% of its market share in 2020.

The value-based care model places greater responsibility on health providers to show proof their services are working, so healthcare providers must track and report information such as patient engagement, adverse events, hospital readmissions, and population health.

This model is a catalyst for health providers to upgrade services, engage patients, offer evidence-based medicine, and use data analytics to improve healthcare.

Creative Insurance Models

For clients who don’t visit the doctor frequently, they may feel hard done with having to pay high premiums for services they hardly use. That necessitates insurance coverage catering to their unique needs, and that’s where consumer-driven health plans (CDHP) come in.

CDHP provides the same health care services under the same benefit structure as other plans, although they have a lower premium cost balance.

However, CDHP is high deductible plan, but paying out of pocket should not be a problem for consumers who have grown their savings in a Health Savings Accounts (HSA), which offers tax incentives.

Data shows freelancers now make up about 36% of the entire US workforce, having tripled their numbers between 2017 and 2021.

Many insurers neglected the gig economy because of their inconsistent incomes, but the insurance industry is finally taking action by providing incentives to these workers, such as slashing costs by 54%. This has seen insurance enrollment rise sixfold in this segment.

Conclusion

With headwinds rocking the entire insurance industry, insurers have had to come up with resourceful solutions to cater to changing consumer needs, leading to groundbreaking health insurance trends.

For instance, insurers are now relying on AI to analyze big data and facilitate data driven decision-making, the blockchain to enhance security, and innovative insurance models to suit varied consumer needs.

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