When I was younger, I always wanted a trampoline. Each year for my birthday and Christmas, I would always write it on my list even though my parents had already explained that our insurance company wouldn’t allow it. Presumably, if they somehow found out we had a trampoline in our backyard, rates would skyrocket in preparation for the eminent injury that would occur as a result of its use. Fitness trackers may pose a similar threat. Though only touched on in a single paragraph by Marwic in “How Your Data Are Being Deeply Mined” fitness trackers may pose a future threat to buyers of health-insurance.
It is well known that previous or current health conditions are considered by health insurance companies before they prescribe a rate to consumers. Fitness trackers can observe and store data on diet, exercise, sleep, and several other factors that can all be predictors of a person’s general well being. Many trackers today also connect to applications that are in some way connected to the internet and social networks. This opens the door for data mining of one’s fitness data. This is a slippery slope as fitness data may be sold to insurance companies who may use it to make insurance rate decisions even in the absence of preexisting conditions. While I am unaware of any current application along these lines, I have no doubt that as our technology continues to develop, situations such as this will arise.
Drew 
mawatters
Very good point. It’s worth diving into the fine details of the Terms of Service for a fitness tracker to see what they do with your data. There’s also the possibility that fitness tracking data could be subpoenaed in a court case, just as phone records sometimes are.
This observation brings forth interesting implications for the nothing-to-hide, nothing-to-fear approach to increased access to what most of us would consider private data. I think most of us can agree that giving agencies access to data associated with illicit activity such as a terrorism or drug cartels is warranted. However, we might feel differently if we begin to be punished for data which is not the result of anything illegal at all.
If use of fitness tracking data by health insurance companies comes to fruition, you could be penalized simply for being a poor exerciser. While nothing about being lazy is illegal, insurance companies see laziness as a threat to health, and thus, potential increased health costs. Therefore, having “nothing to hide” would no longer translate to just being an upstanding citizen under the law. Instead, we would be one step closer to a life which becomes micromanaged by the availability of “private” data.
I’d like to challenge the notion that insurance companies having the ability to perfectly price discriminate as a result of voluntary decisions that an individual makes is necessarily a bad thing. If a uniform flat rate for insurance is charged to all individuals in a community, regardless of their individual risks for various ailments, then the people who make healthier decisions would be subsidizing individuals who make poorer health decisions. If insurance companies were able to perfectly price discriminate, the people who made poorer health decisions would have to pay more than the people who make healthier decisions. This creates a disincentive for the healthiest individuals to purchase insurance, which in turn, will raise prices on the pool of people that remain who would like to buy insurance. This effect is known as “Adverse Selection”, because the individuals who are buying insurance are, on average, less healthy than the average person in the general population. One of the primary goals of the Affordable Care Act was to combat Adverse Selection by requiring everyone to purchase health insurance, which in turn, could theoretically drive the price of insurance down. However, if insurance companies could perfectly price discriminate, such a mandate would not be necessary, because everyone would have the option of purchasing insurance at a fair market price. Also, if individuals in the community knew that insurance companies had the ability to perfectly price discriminate, it would create an incentive for individuals to make healthier decisions, which would only drive prices down as time goes on.
An important caveat to the above argument is that perfect price discrimination should be applied based on voluntary decisions that an individual makes. While there is an efficiency argument that could be made for charging individuals higher prices if they have a history of heart disease in their family, from a moral standpoint, I believe that there is a reasonable argument to be made that people should not be discriminated against for factors that are out of their control.
Spencer’s post really does beget an interesting question though. As data mining continues to improve over time, in what ways do we collectively benefit through access to perfect information, and in what ways are we harmed?