How to Develop a Health Insurance Mobile Application in 2023
This article will walk you through the health insurance app development process from A to Z. We’ll cover:
- Overview of reasons for building a health insurance app;
- Costs breakdown of development;
- What you need to do before development;
- Steps for creating a mobile health insurance app;
- The team needed for the development process;
- Overview of technology stack;
- Tips for choosing the right partner for app development;
- And much more!
The article is a perfect guide for startup founders, product managers, serial entrepreneurs, and anyone else with interest in developing a health insurance mobile application.
If you prefer a visual text experience, go straight to the bonus infographic “How to Develop a Health Insurance Application in 2023”
Let’s discuss the article in detail.
Why is Now the Best Time to Develop a Health Insurance App?
The health insurance market is estimated to be worth $3.3 trillion by 2028.
But we must admit that the insurance market is a red ocean: an old, already divided market between a few key players.
On the other hand – such markets are a great opportunity for creative disruption.
So, developing health insurance apps allows you to test your product hypotheses in a large market with paying customers. And make it profitable from day one.
Still in doubt? Here are some statistics proving that owning a healthcare insurance app is worthwhile.
Statistics on Health Insurance Market Growth
Here are some statistics that suggest health insurance is booming:
- The health insurance industry is expected to grow by a CAGR of 5.5% from 2021 to 2028.
- 29.6 million Americans lack any form of health insurance coverage. This means there’s still a vast untapped market.
- Global health insurance is the fastest-growing InsurTech segment.
- 26% of global insurance premiums are for health insurance.
These impressive growth statistics have caught the attention of venture capitalists, and they’re investing heavily in the sector, particularly in health insurance products.
Here are some facts supporting that.
Overview of Venture Capital Investment in the Health Insurance Niche
Below are some statistics that suggest that VCs are investing a lot in health insurance:
- Alan, a French startup raised $220 million for its health insurance super-app;
- VCs invested over $10 billion on health care and health insurance apps in 2021;
- Sana, a health insurance application, recently raised $60 million in series B funding.
The two sets of statistics above show that owning insurance applications can benefit VCs willing to fund ideas and products in that sector.
Case studies of companies already benefiting from this business model are Oscar Health Insurance, Hi-Tech Health, and Aetna.
The above statistics are indisputable proof that it is worth investing in launching a new healthcare coverage mobile app.
Let’s take a look at how much we are talking about.
How Much Does it Cost to Develop a Medical Insurance App?
Creating a medical insurance app for your startups ranges from $60,000 to $80,000.
The development price will depend primarily on the type of medical insurance app being developed and the type and location of the development team.
Let’s shed more light on each of these factors.
Cost Defined by the Type of Team
The development team affects your application’s cost. The most common team types are a local agency, freelance team, in-house team, and outsourced agency.
Below is a cost spreadsheet detailing the price of creating a medical coverage application using each of these team types:
|Type of team||Average cost, $|
|In-house, the US||170,000|
|Local agency, the US||200,000|
We’ll educate you on the differences, perks, and cons of each hiring model, so you choose the best for your organization.
1. In-house Development Team
This hiring model entails employing a team of developers directly from the labor market to work as full-time employees of your startup.
Here, you must provide a suitable work environment and other legally-bound responsibilities. Before choosing this model, it’s best to consider the pros and cons:
| || |
2. Local Agency
The option of hiring a local agency is to create and maintain a health insurance application by software companies in your country.
Like others, we’ll be shedding light on its pros and cons:
| || |
Due to its expensive nature, startups in high-income countries have to explore other options. Thus, we’ll discuss other cheaper alternatives.
3. Freelance Developers
They are independent professional software coders with expertise in creating apps and websites.
They’re not employees of any organizations and are available for hire on a per-project basis.
Like other options on this list, it also has pros and cons.
| || |
Due to the sensitive nature of health insurance apps, it’s best to opt for a better alternative. As such, let’s discuss a more suitable option.
4. Outsource Agency
Outsourcing involves working with a software development agency outside your country to create and maintain a website, mobile application, or software.
Statistics suggest that the use of outsource agencies in development and maintenance rises yearly, evidence that more startups are adopting this model due to its multiple advantages.
Here are some disadvantages and advantages of partnering with an outsourcing agency:
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Now let’s see how geography affects the cost of developing a health insurance mobile app.
Cost Defined by Location of the Team
Let’s look at the cost breakdown of health insurance app development defined by agency location.
|Location||Average cost, $|
As seen in the spreadsheet above, the cost of developing a health insurance app varies with the team’s location.
In the US, the UK, Australia, and Western Europe, the cost of creating an app is very expensive due to the labor cost in those nations.
Conversely, South Asia has the lowest developmental price on the list. However, they’re known for low-quality apps.
For top-notch cost efficiency, it’s best to opt for a company in Eastern Europe. Particularly a Ukrainian one, as they are prominent for quality apps.
What Makes Health Insurance App Development Different?
Health insurance development differs from others in features and characteristics. While other insurance applications can do away with specific traits, healthcare insurance must:
- Ensure top-notch data privacy,
- Use big data to evaluate and price premiums,
- Guarantee constant availability.
Let’s shed more light on these points:
1. Data Privacy
Privacy of Medical records is key to maintaining the trust of target users. A single leak in a policyholder’s health data can make your insurance app undesirable.
For example, New York fined EyeMed $600,000 due to a leak in patients’ data.
Some steps to safeguarding health care insurance data from your app are:
- Follow the HIPAA and GDPR compliance;
- Cooperation with a highly experienced software development agency;
- Multi-layered QA testing;
- Have a team to enforce data privacy policies;
In the process of app development developers don’t need access to any kind of users or patients’ health information. They could use test, faked sets of data.
Once you’ve ensured top-notch data security, another challenge to surmount is data gathering and usage.
2. Big Data Insights
The growing usage of artificial intelligence and wearable technology like the Apple Watch and Fitbit led to increased personal data collection.
Health insurance companies use Big Data analysis to identify potential health risks.
Insights from these analyses incentivize health risk reduction, accurately underwrite, and predict the risk factor of different groups.
It’s also crucial to help health insurance startups determine the best premium coverage plans.
As a start point, you can consider buying such Big Data insights. Otherwise, to gather user data from your app, do the following:
- Configure data collection metrics,
- Integrate third-party app analytics tools,
- Integrate relevant aHIPAA and HITECHrtificial intelligence systems.
Beyond Big Data, uptime reliability is another essential feature that makes healthcare app insurance different.
3. Uptime Reliability
Health insurance apps require regular uptime availability as many insurance policy owners require on-spot emergency insurance claim payment and verification.
However, not having a proper backend infrastructure can result in recurring downtimes, preventing app users needing urgent care from accessing emergency healthcare services.
You can ensure a top-notch uptime rate by
- Adopt a reputable infrastructure provider,
- Have a 24/7 customer support team,
- Have backups plans for server failure,
- Hire a software maintenance team.
Although the features mentioned above are suitable for all insurance apps, they’re of utmost importance in the health insurance niche.
Before you start creating your app, there are things to do before commencing development.
Things to Consider Before You Start Health Insurance App Development
Common mistakes made by entrepreneurs and founders before creating their products are:
- Not having a marketing budget
- Not identifying relevant regulatory laws.
Let’s help you makes sense of these.
1. Plan a Marketing Budget
A survey by Statista in the United States suggests that significant health insurance companies spent $184 million on marketing alone.
According to U.S. Bank, the lack of a well-developed marketing plan is responsible for small business failure.
These statistics show that although large insurance businesses know that budgeting is the key to dominance in the market, small startups are often negligent of this.
As a startup, ensure a robust marketing budget to help you attain your business goals and fund your marketing strategy.
Your marketing budget should be 2x-3x your product design and development budget.
Assuming the cost of your health care insurance app is $50,000, your marketing budget should be about $100,000 and $150,000 yearly.
2. Think of Legal Compliance
Health care insurance is regulated by various laws that vary with your country of residence.
Here’s a spreadsheet of regulatory laws and countries where they apply:
|Regulatory law||Startups Affected|
|HIPAA and HITECH||Both laws regulate startups and businesses operating in the United States. |
HIPAA, which stands for Health Insurance Portability and Accountability Act, mandates startups to take adequate steps to protect patients’ health information.
HITECH criminalizes deliberate leaks in user health data and leaks due to negligence from insurance agents and service providers.
|GDPR||The General Data Protection Regulation enforces data protection and privacy for startups operating in the EU.|
|PIPEDA||PIPEDA regulates businesses operating in Canada on the use of consumer data. |
All Insurtechs operating in Canada are also regulated by the Office of the Superintendent of Financial Institutions. They protect users from EHR leaks.
|PCI-DSS||All health insurance startups accepting payment cards must abide by the Payment Card Industry Data Security Standard.|
Use these tips to optimize compliance:
- Have an in-house insurance and financial services legal compliance team;
- Only partner with an app development company that understands compliance laws;
- Hire an in-house human resource team with knowledge of present labor laws;
Feel free to read more about healthcare app development and HIPAA compliance app development in our complete guides.
Once you’ve figured out the above, you can commence development.
How to Develop a Health Insurance App
Here, we’ll discuss the 4 stages of health insurance mobile app development.
Once you develop a Minimal Viable Product, you can then launch, gather feedback, and make necessary modifications based on the feedback obtained.
The first ideal step in product development is the discovery phase. Let’s shed light on what it entails.
Step 1. Discovery Phase
This phase involves gathering information on project requirements and researching an ideal development workflow.
The development team outlines features to build, create milestones, and identifies niche-specific compliance laws to be mindful of.
Let’s break down the discovery phase into steps:
|Market Research||Nearly half of all business failures can be traced to poor market research. |
Through in-depth market research, you’ll understand the acceptability of your product, market size, and health risks of different groups.
|Competitor Analysis||Health insurance market is overly saturated. Thus, analyzing your competitors’ weak points and strengths is imperative to carve a unique market niche. |
Lack of detailed analysis has been responsible for 19% of business failures.
|Identify your goals||CB Insights report that lack of goals is the primary cause of 13% of business failures. |
As such, brainstorm your business and technical objectives, and ensure your development workflow aligns.
|Cost analysis||Starting a health insurance business is capital intensive. |
As such, it’s best to conduct a detailed cost analysis and consult your investors for development, marketing, and maintenance funds.
The benefit of this process to founders entails:
- Cost reduction,
- App idea validation,
- Risk identification and management,
- Identification of the best team to develop your product.
After mapping the development process, you can start designing the app.
Step 2. Design Phase
The list of requirements you’ve mapped out in the discovery phase is used to make the UI/UX design for the application
The delivery phase here includes one or more designs that maximize the product’s business goals and can aid the development process.
We’re not going to look at the details of the design itself since we have an insurance application design guide but instead talk about the role of the UX/UI stage in the development process.
The app design process helps communicate the values of the product and ensures the app appeals to the target audience in the ideal way possible.
The prototype design also acts as a guide to aid development and predict expected deliverables.
This phase is very flexible as output often requires adjustments based on feedback from users and stakeholders.
At the end of the design phase, you should have these:
- An interactable prototype,
- A user experience wireframe for different screen resolutions,
- An original Figma design file,
The development only commences when all stakeholders have approved the deliverable from the design phase.
Step 3. Development and Testing Phase
Health insurance app development is all about turning a design into a live app using the code.
There processes here can be divided into the mobile, backend, and sometimes, frontend development. They both mean:
- Mobile development stands for the app’s creation, a client-side interface, and implementation endpoints from the backend. For cross-platform apps, use React Native or Flutter, and for native ones, use Swift or Kotlin.
- Backend development builds behind-the-scenes functionalities necessary for the proper workings of the solution. These developers use backend languages like Node.js, Java, and PHP.
- Frontend is the same thing as mobile development – the creation of an interface. Sometimes it is used to develop web-based admin panels for mobile products. Here developers could use React.js, Vue.js, Angular, and so on.
This division is arbitrary since the interface can be developed separately from the database.
It is also important to note that development is an iterative and iterative process:
- You outline the features,
- You create documentation,
- You design a future app,
- You develop it,
- You test it and push it to development again,
- You have a bugs-free app.
This is what a typical iteration looks like. There can be an infinite number of iterations, depending on the features and the frequency of their updates.
Let’s talk more about this. Let’s give you insight into the generic and niche-specific features your insurance app should have.
Example of Features to use in a Health Insurance MVP
The role of an MVP is to test startup hypotheses on the market quickly and cheaply. Thus, these features set – the minimum your health coverage app should has:
- User profile,
- List of available policies,
- Health insurance plans listing,
- In-app payment gateways,
- Document scanner,
- Push notifications.
And now, let’s take a look at feature expansion.
Example of Features to use in Scaled Health Insurance Product
- Healthcare providers pairing,
- Lab result checker,
- Appointment scheduler,
- Telemedicine, and other mHealth functionalities.
The next and final step in development is to launch your product into app stores.
Step 4. App Launch, Maintenance, and Improvements Phase
We’ve already talked about the marketing budget – this is when you start spending it.
The role of marketing is to attract users. Product managers will collect data on how the different stages of the customer journey are going and user feedback.
By putting these two things together, stakeholders will plan future releases that align with the founder’s vision, market trends, and user expectations.
However, work doesn’t end there as you’ll have to expend time to maintain it.
You need a fully dedicated app team to support your health insurance app technically.
Ideally, your maintenance team should run on a yearly budget of about 25% of your Insurtech mobile app cost.
If it costs $100,000 to develop an app, your maintenance budget shouldn’t be less than $25,000. The bulk of your budget will be expended on:
- Bug correction,
- Feature extension,
- Monitoring & analytics,
- Real-time product support.
Now let’s take a look at the best-suit team composition.
Required Team Composition for Creating a Mobile Insurance App
The team required to develop a fully-functional health insurance app is:
- Project Manager
- Business analyst
- Solution architect or CTO
- UI/UX designer
- Backend developer
- Mobile developer
- Quality assurance tester
Tech Stacks Needed to Create an Insurance Platform
When it comes to technology stacks, the options are numerous.
Let’s take a look at some stacks that we use, particularly those that can guarantee a highly secure product:
|Backend||Node.js, Express.js, Laravel|
|Database||MySql, MongoDB, and Redis|
|Mobile development|| |
|UI/UX design||Figma, Principle, and Balsamiq|
|Management||Slack, Jira, and Confluent.|
What’s next? Let’s discuss some tips for developing a health Insurtech product.
How to Choose Health Insurance App Developers?
Let’s educate you on choosing a reliable app development agency for partnership.
Tips below are universal, and you can use them as a guide to choosing programmers for your health insurance application. Below are the steps to follow:
- Check the portfolio of prospective vendors. Check their track record of past projects to vet their capacity to deliver on their promise. However, this is not the best marker if you create a new product with rare functionalities. But if you like the quality of their products, then it’s a hint that they have enough expertise to pull through with the deliverable.
- Check the vendor’s background. Before signing a contract, spend time researching reviews on reputable business listings. Check out their social media profiles, websites, blog posts, case studies, etc. Contact some past or current customers within your network of influence, and ask questions about their capacity.
- Hold one-on-one discussions with vendors. Once you’ve shortlisted a few prospects, it’s time to discuss with its development team and see if they’re knowledgeable enough. If you don’t have technical experience, it’s best to involve an expert, preferably your CTO. And for sure, compare fees.
Let’s help you with your health insurance app development process by creating a solution that meets your business and technical requirements.
At SpdLoad, we’ll design, develop, and deliver a health insurance app MVP in just 4 months. Doubt our pedigree as an app development service provider? Then surf through our portfolio and page on Clutch.
Here is a summary of our detailed guide. Learn the highlights of developing a health insurance application and the factors that affect pricing.