Do you think Apple likes the subsidy model for iPhones? Apple was basically forced down that route with the iPhone because the market was already entrenched such that subsidies were expected. If the market was a clean slate, I don’t believe that Apple would have wanted to instate a relationship in the market that was so reliant on the carrier.
Therefore, in the watch/band market, I think subsidy models are the last thing in Apple’s mind. If Apple can ship the product for a reasonable price without any strings attached, then that’s what they are going to do.
Dealing with middlemen is too much complexity and frustration. As an outsider, the concept of collaborating with health insurers sounds messy. I would hate to organise something like that and I don’t think Apple would like it either.
Down the line, perhaps there is the potential for health insurance rebates but that can’t be the the primary go-to-market strategy. It just can’t be.