Pact Health moved the insurance deductible up and down with gym attendance

High-deductible health plans were becoming more popular in the US, but an AP poll found they kept people from care: 19% of privately insured adults said they had skipped the doctor when sick, and the number jumped to 29% among people with high-deductible plans. Pact, formerly known as Gym Pact, already ran an app where users committed to exercise and made or lost money depending on whether they followed through.

In 2014 CEO Yifan Zhang extended the idea to insurance itself. Pact Health was a supplemental plan employers purchased in addition to regular coverage; employees could opt in and set workout goals. Each verified workout — confirmed by GPS dwell time at the gym, Fitbit, RunKeeper or an internal step tracker — took $5 off the deductible, and each missed workout added $5. Participants could save up to $1,300 on their deductible in a year, or add up to $500 by skipping every planned session.

The verification was deliberately concrete: GPS had to show the member was actually at the gym and staying for at least 30 minutes. Alongside the Gym Pact ran a Veggie Pact, where members photographed fruit and vegetable consumption for community verification, and a Food Log Pact that paid for consistent logging in MyFitnessPal. In the consumer app, forfeited stakes from missers went into the pool that rewarded keepers, so the incentive scheme funded itself.

"There's no reason your deductible has to be a dumb deductible — an incentive that doesn't change," Zhang said. "If we can change people's behavior, we're generating value for insurance companies." Fast Company noted the terrifying prospect of paying even more for care was probably a bigger motivator than any savings — and that employees did not have to participate at all.

A deductible does not have to be dumb: let workouts take $5 off and missed workouts add $5 to it

Missing a workout raises the deductible, and the prospect of paying more for care is a stronger motivator than the promise of savings.

Every workout is verified automatically by GPS dwell time, Fitbit or RunKeeper feeds, so no claims process is needed.

In the consumer pacts, the missers' forfeited cash funds the keepers' rewards, so the pool pays for itself.

Behavior change generates value for insurance companies, as Zhang put it, because healthier members cost the plan less.

A flat incentive pays the same for showing up as for slacking. Anchor the reward in a number people already watch — the deductible — and let their behavior move it.

The source article reports only the 2014 launch mechanics: employers bought Pact Health as a supplement to regular plans, participation was voluntary for workers, and the plan could move a deductible by up to $1,300 down or $500 up in a year. It gives no adoption figures or later results.