It sounds like aligning incentives here is requiring the weight stay off for the policy to remain in effect with an annual physical for monitoring, similar to what employers require for health insurance premium reductions. Point in time underwriting is suboptimal considering current state of the art of GLP-1s (unless newer protocols that can update metabolic profiles are delivered soon).
I guess, but this is sort of the same as going on a statin to get your cholesterol down for a better insurance rate. Then going off because of reasons...
Obesity is highly correlated with other medical conditions, from cancer to diabetes to heart disease. I wonder if there is a point at which it is cheaper for health insurance companies to offer subsidized or even free GLP-1s to patients than pay out for other specialized medications. For example, my insurance covers flu shots in my community every year because it's presumably less expensive to pay for the shots compared to the increased rate of hospitalization that the flu causes.
It's never cheaper for insurance to buy something for everyone. There's extra administrative costs to them being the middle man, so it makes much more sense for insurance to incentivize you to buy it yourself, through premium pricing.
For example, fire extinguishers and security cameras will reduce crime by more than their costs, but instead of charging you for them, plus administrative costs, and shipping them to you, your insurance provider will offer you a discount if you have them. (Really it's a price increase if you don't have them, but regulators don't like it when they call it that.)
Not everyone will benefit from GLP-1, so in this case, the most beneficial solution would be to charge higher premiums for anyone that could benefit from GLP-1 but doesn't use it.
"Life insurers can predict when you'll die with about 98% accuracy."
This conclusion isn't supported by the linked document. The document instead is talking about expected vs actual deaths among demographic groups as a whole, not individual people. And that expected vs actual is just history + trends. This doesn't mean that insurance can say that Joe Blow is going to die in June of 2027 with "98% accuracy", obviously.
I've always felt that there's some trade to be done here, with life and health insurers basically giving glp-1 et all for free bc they lower the cost of everything else
edit: and then Big Annuity lobbying to oppose this
I realize this is a fraught question, because not everyone is overweight by choice (whether due to a subsisting on whatever they can afford, time, genetics, injury, etc,.) but I believe that insurers are able to consider whether someone smokes cigarettes when setting premiums for ACA based healthcare. With the above caveats that would make this difficult, it would be nice if we could treat "voluntary" obesity similarly.
I believe AI along with smart glasses that shows and calculates your daily caloric intake will be a SUBSTITUTE (another option) to the Ozempics.
With AI glasses doing this automatically for you upon seeing what your eating without u having to do anything some people may be shocked to learn how many calories they consume daily.
Currently, it's too time consuming now for the majority to do (i use GPT via texting it or talking to it to keep track as I eat out daily at healthy chains) but if it was done automagically I believe it definitely would be a substitute to Ozempic. I bet some or more would use that easily captured data that's shown to them (in the glasses or on their mobile device) to strive, make and possibly compete with their friends/family to eat less calories and carry less weight on them (be healthier). You can train your body to eat less to a lot less and for some that would definitely help them shed weight. The glasses could as well deduct calories burned from your daily walk, jog, etc.
*Being downvoted hmmm do you think AI by seeing it can't via an image calculate the calories of a burrito bought from Chipolte and other chains? All chains have nutrition information on their websites now that GPT goes and fetches. As for home cooked prepared meals I have taken pics of my food via GPT and it seemed to come close.
So... There's a miracle drug powerful enough to robustly lower people's all cause mortality, but since health insurance and life insurance are industries with vastly different time preferences, this is not a good thing for the life insurers because people just keep getting off the magic longevity drug and screwing up their predictions. Because, admittedly, it kind of sucks in the moment to be on.
And I'm guessing just based on my own experience paying for term life that the actual premia differences aren't actually enough in most cases for the life insurer to simply pay out of pocket themselves; the differences probably add up to a few hundred per year per customer, whereas a year's worth of a GLP-1 agonist probably costs a couple thousand (for now, in 2025, and probably dropping rapidly).
Huh. Second order implementation details aside, this is an extremely fortunate turn of events for us.
I was on Mounjaro for two months. I was also dieting and walking 10k steps a day. I lost 25 lb and my A1C went down to 5.0 from 5.7. All my cholesterol numbers were in range. I stopped taking it and lost 25 more. I haven’t regained the weight. People who gain it back did not learn the lesson and did not effectively change their habits. You need the discipline - and a good support system. But if you don’t have that and continue old habits then you will gain weight back. The original problem isn’t solved.
so surreal reading comments... a month after non-stop threads about glp causing a billion issues, everyone is talking about how wonderful they are again.
More sensationalism. Insurers can simply adjust the policy accordingly to account for patients discontinuing the drug. They can also raise premiums if patients go off the drug, and there can be a cluse that stipulates this. This is literally the job of an actuary to reprice premiums . Insurers take a short-term hit and then adjust premiums to ensure it never happens again. This happened with California fire risk for example. Moreover, this drug will not increase life expectancy by that much even with lifetime patient compliance. The majority of obese people ,especially men, who take these drugs will still be overweight or obese, but just not as much as before.
The article is missing some key points about insurance. An ideal book balances mortality and longevity risks. This cancels out the risk GLP-1s or many other actuarial shifts in mortality. Insurers swap risks, reinsure risks etc to move towards an ideal book. Nice products to balance are pensions and longevity. Problem is that the scale is quite different on a per policy basis, and also very location specific.
The article also misses regarding slippage is that Swiss Re in the link calls it a modest increase And that is mainly due to insurers Not performing the same level of medical intake (accelerated versus full underwriting). Increased competition leads to less profits. That’s pretty straightforward and not per se GLP-1s related.
And then the kicker. For not diversified portfolios of mortality risks. Those have been massively profitable for decades, in line with the general increase in age and health. GLP-1s just expands on that profitable aspect. Did I mention that the long term expected rate of return on an insurers book is quite good?
Insurers can weather a bit of slippage. Reinsurers will kick the worst offenders back in line with their AUC performance, because without diversification Or reinsurance it’s hard to stay in the market. (Capital requirements strongly favor diversification. Mono line is very hard.) That’s why Swiss Re is bringing out such rigorous studies of detailed policy events. Signaling to the reinsurance markets and the insurance companies and their actuaries!
If insurers are suffering from "mortality slippage" because some of their customers purchased insurance while on GLP-1s then later discontinue the medication, then there must also be "mortality slippage" in the opposite direction. There must be customers who were not on GLP-1s when they purchased insurance, but could go on them, extending their lives in a way that is very profitable to the life insurance companies.
Furthermore, there are more people not on GLP-1s than on them (even with the recent surge in popularity) so this population that can give life insurance companies "excess" profits must outnumber those the article describes where the insurance company takes a loss.
Seems like insurers should be rating based on your worst health markers, including weight, over the last N years rather than just a current point-in-time snapshot. Someone who somehow has no medical records over the last few years at all that would capture any of that data would be priced on the assumption the past was possibly worse than current.
Is the slippage graph just for net life increase slippage?
Or any slippage?
It caught my eye this explosion in slippage happened years before GLP-1s, and exactly in the year of a global pandemic that had sky-high mortality rates for older people.
I think it's unlikely that the quoted 65% of GLP-1 users will go off the drug and resume their unhealthy lifestyle as the drugs go off patent and become more affordable. It's not super inconvenient to stay on, just expensive (today, using the name brand formulations). Users benefit from good health more than they benefit from deceiving life insurers.
Now expand this to other treatments: HIV, PreP, depression/anxiety, ADD, ADHD, you name it. We’ve had data for decades that adherence is the key factor in successfully lowering mortality and increasing quality of life, which in turn increases duration of productive life, which in turn lowers costs in the long run as more people live healthier, longer, more productive lives.
The problem continues to be the pharmaceutical and health insurance industries, particularly in the West. Under pressure to deliver infinite growth forever to shareholders on a quarterly basis, companies have a vested interest in making less medication at a higher price, and lobbying the government to prohibit price negotiations while mandating insurance coverage for many of these drugs.
GLP-1s might be the proverbial straw that broke the camel’s back, but there’s decades of research - and bodies - saying this over, and over, and over again.
Which reminds me: I need to call my new health insurance company to get them to cover my medication, and hopefully extend it to 90 day supplies. Because god forbid that just be an automatic thing for someone who’s taken the same medication daily in some form for a decade without adherence issues.
I don't think this is addressing the thrust of the article, which is that Life Insurance companies are getting "fooled" by patients who on paper are healthier then they are in reality. Someone on PreP to prevent getting HIV is as healthy on paper as they are in reality as far as I can see.
This blog post is flawed.
"Life insurers can predict when you'll die with about 98% accuracy." Is not even properly framed and is found nowhere in the cited report.
Predictions of when you will die need a range in order to be attached to a number like accuracy. The attached report is not about this but about population-level mortality trends.
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[ 4.5 ms ] story [ 77.2 ms ] threadFor example, fire extinguishers and security cameras will reduce crime by more than their costs, but instead of charging you for them, plus administrative costs, and shipping them to you, your insurance provider will offer you a discount if you have them. (Really it's a price increase if you don't have them, but regulators don't like it when they call it that.)
Not everyone will benefit from GLP-1, so in this case, the most beneficial solution would be to charge higher premiums for anyone that could benefit from GLP-1 but doesn't use it.
"Life insurers can predict when you'll die with about 98% accuracy."
This conclusion isn't supported by the linked document. The document instead is talking about expected vs actual deaths among demographic groups as a whole, not individual people. And that expected vs actual is just history + trends. This doesn't mean that insurance can say that Joe Blow is going to die in June of 2027 with "98% accuracy", obviously.
edit: and then Big Annuity lobbying to oppose this
The biggest part of that equation is regain part. Most people quit GLP-1s because of costs. Let's fix that.
With AI glasses doing this automatically for you upon seeing what your eating without u having to do anything some people may be shocked to learn how many calories they consume daily.
Currently, it's too time consuming now for the majority to do (i use GPT via texting it or talking to it to keep track as I eat out daily at healthy chains) but if it was done automagically I believe it definitely would be a substitute to Ozempic. I bet some or more would use that easily captured data that's shown to them (in the glasses or on their mobile device) to strive, make and possibly compete with their friends/family to eat less calories and carry less weight on them (be healthier). You can train your body to eat less to a lot less and for some that would definitely help them shed weight. The glasses could as well deduct calories burned from your daily walk, jog, etc.
*Being downvoted hmmm do you think AI by seeing it can't via an image calculate the calories of a burrito bought from Chipolte and other chains? All chains have nutrition information on their websites now that GPT goes and fetches. As for home cooked prepared meals I have taken pics of my food via GPT and it seemed to come close.
And I'm guessing just based on my own experience paying for term life that the actual premia differences aren't actually enough in most cases for the life insurer to simply pay out of pocket themselves; the differences probably add up to a few hundred per year per customer, whereas a year's worth of a GLP-1 agonist probably costs a couple thousand (for now, in 2025, and probably dropping rapidly).
Huh. Second order implementation details aside, this is an extremely fortunate turn of events for us.
humanity
The article also misses regarding slippage is that Swiss Re in the link calls it a modest increase And that is mainly due to insurers Not performing the same level of medical intake (accelerated versus full underwriting). Increased competition leads to less profits. That’s pretty straightforward and not per se GLP-1s related.
And then the kicker. For not diversified portfolios of mortality risks. Those have been massively profitable for decades, in line with the general increase in age and health. GLP-1s just expands on that profitable aspect. Did I mention that the long term expected rate of return on an insurers book is quite good?
Insurers can weather a bit of slippage. Reinsurers will kick the worst offenders back in line with their AUC performance, because without diversification Or reinsurance it’s hard to stay in the market. (Capital requirements strongly favor diversification. Mono line is very hard.) That’s why Swiss Re is bringing out such rigorous studies of detailed policy events. Signaling to the reinsurance markets and the insurance companies and their actuaries!
Furthermore, there are more people not on GLP-1s than on them (even with the recent surge in popularity) so this population that can give life insurance companies "excess" profits must outnumber those the article describes where the insurance company takes a loss.
Why can't they focus on this profit opportunity?
Source? I agree that some people will regain the weight, but "usually" is an unfounded (without some data) generalization.
That same year, it paid out roughly $800B in claims.
TL;DR: there's no violin tiny enough for me to play for the life insurance industry's 'woes'.
Or any slippage?
It caught my eye this explosion in slippage happened years before GLP-1s, and exactly in the year of a global pandemic that had sky-high mortality rates for older people.
The problem continues to be the pharmaceutical and health insurance industries, particularly in the West. Under pressure to deliver infinite growth forever to shareholders on a quarterly basis, companies have a vested interest in making less medication at a higher price, and lobbying the government to prohibit price negotiations while mandating insurance coverage for many of these drugs.
GLP-1s might be the proverbial straw that broke the camel’s back, but there’s decades of research - and bodies - saying this over, and over, and over again.
Which reminds me: I need to call my new health insurance company to get them to cover my medication, and hopefully extend it to 90 day supplies. Because god forbid that just be an automatic thing for someone who’s taken the same medication daily in some form for a decade without adherence issues.
Predictions of when you will die need a range in order to be attached to a number like accuracy. The attached report is not about this but about population-level mortality trends.