There are already insurers which offer incentives to employees who exercise as tracked by their smartwatch. Vitality UK does this [1].
On the face of it, this doesn't seem terrible. It encourages people to stay active. So far it seems to be limited to an airmiles-type scheme where you can get bonuses like Amazon Prime for free if you meet certain fitness targets. With Vitality you would need 5.3 points a day (160/month) - you get 5 points for 10k steps so you actually have to exceed that every day.
The problem with these systems is that the incentives are poor relative to the amount of effort you need to put in. Amazon Prime is nice, but it's valuing you exercising daily at around £8/month. If you can afford Vitality in the UK, either you're already well-off or you work for a company which can afford it. Why not offer free fitness club membership if you go regularly?
The other issue is that tracking workouts sometimes fails, and you lose your bonus. That sucks and it's an easy way to lose people who can't be bothered to put in extra effort to make up it (for the sake of £8, for example).
Probably we'll go to the automotive model (black box trackers). Some insurers will offer lower premiums to people who can demonstrate they're healthy, others might refuse people who don't submit their data, and others will charge a bit extra, but not require it.
Be careful viewing this with a US lens. In Europe even in countries like Switzerland where you need private "public" health insurance there are strict minimum requirements. Insurers can't refuse you for pre-existing conditions, there are mandatory caps on premiums/deductibles and certain expensive treatments like cancer therapy must be included. Most people don't need health insurance because it's provided through the state.
Of course this is terrible. Adults are being increasingly ordered around by devices and get grades from Google, insurers, banks and probably the government if things continue in this manner.
The industry in Europe pushes for adults being treated like schoolchildren. In Germany the polite form "Sie" (you) is universally replaced by "du" (thou), which formerly was reserved for children and friends.
Websites are infantilising people with their cuddly pre-school logos and childlike names.
I don't see it, "adults being treated like schoolchildren" seems melodramatic when it could just as easily be called precision insurance. Why should the customers who go out of their way to maintain a healthy lifestyle have to pay the same rate as the ones who just watch streams and game all day?
I see this as a feature on some level. I know it sounds bad "google will have access to your fitness records and will sell to insurers that'll affect your premiums/approval, etc etc". But I would argue that our "insurance" models need to be brought in line with a all-data-is-logged world so that we can solve some of the issues.
Maybe we as a society want to rather "subsidize" or "protect" unhealthy individuals by giving them money for higher premium insurance rather than hiding the actual cost of their healthcare by making it illegal for insurance companies to deny them based on their unhealthiness. To me that seems like a better, more explicit and transparent model that doesn't rely on physical reality being "hidden" from the people determining the cost of your insurance, even though we all know that unhealthy people cost more to insure because they have more health issues.
In modern markets, prices are overwhelmingly determined by demand rather than cost.
People with more problems pay more to get insurance because they cannot afford not to. Insurance companies are not run at-cost.
By giving them more excuses to scrutinize your lifestyle, you are just exposing yourself to the risk of them, one day, objecting to anything in it to raise prices on something you cannot afford not to pay.
This is THE most problematic part.
I am trying to make people understand this match made in hell for last 20 years and it has finally started to happen.
People will finally start to pay for their open sharing of their lifestyle and this is just the beginning.
Really, really bad.