Last Thursday Patently Apple posted a report titled "John Hancock Insurance is Expanding its Vitality Program to now Offer the Apple Watch 5 for $25 + Tax for Policyholders." Today we're learning that Devoted Health, a start-up health insurer targeting seniors with its private Medicare plans, says it is the first to offer Apple Watch as a fitness benefit to its members. The company will offer up to $150 off the cost of an Apple Watch for its members.
More than 20 million Americans over the age of 65, and growing, are currently enrolled in a Medicare Advantage program. These plans, which are run by private companies, are approved by Medicare to cover seniors’ health, typically with more flexibility and a broader array of benefits. Overall, the market is expected to generate more than $350 billion in annual revenue by 2020, according to the consulting firm PwC.
For Apple, working with Medicare Advantage plans offers a big potential to boost device sales because seniors are increasingly adopting smartphone technologies and therefore might be interested in a smartwatch.
Apple has been courting this population by introducing features and services that are intended to be beneficial to older users, such as fall detection and heart health monitoring.
Moreover, Medicare Advantage plans have more of an incentive to embrace consumer-facing technologies as they tend to retain members for longer than commercial plans, and are therefore looking for ways to invest in members’ long-term health and well-being.
Wearables are still a nascent technology, and studies are underway to assess whether they are moving the needle on healthy outcomes. But for these plans, offering Apple Watches as a fitness benefit might be a way to sign up and retain members interested in staying active later in life, where there are proven benefits to healthy eating and exercise.
Other Plans Following Suit
Health experts say that Apple likely benefited from recent changes to the rules set by the Centers for Medicare and Medicaid Services (CMS). These changes, introduced earlier this year, allow plans to offer a greater flexibility of benefits, which have a reasonable expectation of improving the overall health of the member. For more on this, read Christina Farr's report on CNBC.