AI in Health Insurance: How is it Being Used & Why?

Artificial intelligence (AI) is making its way into many industries, and the health insurance industry is no exception. Much uncertainty still surrounds the benefits of AI use for specific industries, but there is no doubt that it’s making an impact.

As a global management and technology consulting firm, we at AArete are passionate about discovering solutions AI can provide to our healthcare payer clients. To get a better picture of how and why AI is being used in the health insurance industry, follow along below.

Why is there a need for AI in the health insurance industry?

Just like with any industry, there are always challenges to overcome and new strategies to develop as member needs and technological landscapes evolve. Health insurance companies and professionals are turning to AI to help tackle these obstacles and strategies head-on.

Here are a few major reasons why AI is being used in the health insurance industry:

It improves and quickens data analysis

• AI can analyze large amounts of data quickly and accurately. And because health insurance relies heavily on data analysis for decision-making, AI has become an easy solution.

It detects fraud

• Health insurance fraud is a risk for payers, and, unfortunately this industry is quite vulnerable to it. AI is able to identify suspicious patterns in claims data, which helps detect fraudulent activity as it’s happening and, in turn, saves parties time and money.

It provides responsive, round-the-clock member services

• When insurance holders seek answers, it’s important to be available. AI-driven chatbots and virtual assistants are able to provide 24/7 support, answer questions, and direct individuals to accurate resources, which ultimately enhances member satisfaction.

Five ways AI is being implemented in health insurance

As we shared above, AI is becoming increasingly utilized in the health insurance industry to streamline processes, improve member satisfaction, reduce costs, and enhance overall processes. Here are five direct and specific ways AI is being used.

1. Claims Processing

AI algorithms analyze and process insurance claims quickly and accurately, reducing the time it takes to settle claims. This both aids in the fraud detection process and improves member satisfaction and business operations. It also has a very practical influence to improve auto-adjudication, limit the amount of prompt pay liability, and, reduce the friction between payers and providers.

2. Actuarial Analysis

This goes hand-in-hand with analyzing data. More specifically, actuarial analysis involves analyzing all types of data that flows through the system (claim, medical records, enrollment, disbursement, premium billing, etc.) to more efficiently understand and plan for claim liabilities. This also improves risk management.

3. Personalized Member Experience

Leveraging deep data analysis capabilities offered by AI allows for a more complete picture of your members. This enables more personalized communications, plans, and overall experience, providing great value to members by suggesting members consider benefits that are underutilized or promoting healthy behaviors and wellness benefits that are included in their plans. These AI capabilities also lend themselves to improving member experience by helping expedite prior authorization and getting members better care, faster.

4. Providing Predictive Analytics

Anticipating member needs is a huge win for health insurance companies. It shows they understand the policyholder and are looking out for their best interest at all times. AI technology is able to predict future health trends and assess the likelihood of certain medical conditions, helping insurers make smart decisions in relation to pricing and plan coverage. AI can also recommend the next best action or steps that should be taken to avoid a bad outcome.

5. Remote Monitoring & Telemedicine

The ability for healthcare providers to conduct appointments virtually has greatly impacted the member experience. With help from AI, insurers are able to integrate telemedicine and remote monitoring solutions into their benefits packages in order to provide convenient, on-demand care for policyholders while leveraging these precious member interactions to make targeted clinical recommendations that will promote health or avoid sickness.

While these implementations have been helping health insurance companies grow, the full effects of AI have yet to be seen. AI is certainly revolutionizing the health insurance industry with all of the strategies and services listed above, but it’s important to remember the potential ethical concerns and legal ramifications that come with sharing and handling private health information.