Incentivizing Healthy Behaviors and Personal Responsibility

To help better prevent and control costly conditions such as chronic diseases, and to break the cycle of poor health, states are experimenting with mechanisms to incentivize healthy behaviors and personal responsibility for wellness. This past October, as part of the 29th Annual State Health Policy Conference in Pittsburgh, PA, leaders from Connecticut, Idaho, and Indiana shared their experiences along with the unique approaches their states are taking to address this issue. As part of the session “Incentivizing Health Behaviors and Personal Responsibility: What Have We Learned?” the leaders addressed how these approaches align with their states’ priorities and goals. Connecticut offered cash incentives to Medicaid beneficiaries attempting to quit smoking, while both Idaho and Indiana reduced cost sharing in public health insurance programs if beneficiaries perform certain healthy behaviors.

Among the three states discussed here, Connecticut’s incentive program has the narrowest scope. The state received a five-year federal Medicaid Incentives for Prevention of Chronic Diseases (MIPCD) grant to test the effectiveness of financial incentives in encouraging tobacco cessation among adult Medicaid beneficiaries. Connecticut’s program, Rewards to Quit (R2Q), began enrollment in April 2013 and divided enrollees into control and intervention groups. Those in the intervention group who utilized smoking cessation services or quit could receive money through a debit card. As of April 2016, 3,692 participants were enrolled in the program, compared to the enrollment goal of 6,210. Connecticut’s presentation slides at the NASHP Conference offer more details on the state’s MIPCD program.

Unlike Connecticut and Indiana, Idaho has not expanded Medicaid, and the scope and target population of Idaho’s program is more narrow than Indiana’s, The wellness arm of Idaho’s Preventive Health Assistance (PHA) program, introduced in 2007 as an amendment to the state’s Children’s Health Insurance Program (CHIP), has incentivized child wellness visits and vaccinations by reducing premiums for families whose children receive these services. In 2016, 18,809 out of 20,021 (93.9 percent) children in Idaho’s CHIP population have premiums, the remaining were exempted from paying premiums. Approximately 66 percent of these children’s families have earned premium reductions as a result of wellness visits. Prior to the implementation of PHA, only 40 percent of these children were up-to-date with their wellness checks and immunizations. Please see Idaho’s presentation slides at the NASHP Conference for more information.

Indiana’s approach to incentivizing personal responsibility for wellness is similar to Idaho’s. Since 2008, Indiana has offered low-income individuals a high-deductible health plan paired with a health savings-like account called Healthy Indiana Plan (HIP)[1]. In 2015, the state expanded Medicaid under an § 1115 demonstration, and “HIP 2.0” became available to all non-disabled Indiana residents ages 19-64 with income up to 138 percent of the federal poverty level (FPL), including those that were previously eligible for Medicaid. As of November 2016, there were almost 400,000 enrollees[2]. HIP members can make monthly contributions to their POWER accounts, a feature of HIP that is similar to a health savings account (HSA). Members with income under the FPL who do not make POWER account contributions are transferred to a more limited plan without dental and vision coverage and are subject to co-payments for services. All CDC-recommended preventive services are available to all HIP members at no cost. HIP incentivizes its members to utilize prevention services by allowing unspent POWER account contributions to roll over to the next year to reduce future account contributions if members receive required preventive services. According to the state, HIP members who contribute to their POWER accounts are more likely to obtain preventive care (64 percent) than members who do not contribute (45 percent). For more information, please refer to Indiana’s slides presented at the NASHP Conference.

Evidence-based chronic disease prevention programs have a potential to reduce health care costs, and the results of these relatively new initiatives to incentivize healthy behaviors and personal responsibility will provide more information to policymakers. Historically, designing effective incentive programs has been a challenge. Previous research suggests that incentives are more effective in the short-term than in the long-term[3]. This raises several questions that states and other stakeholders should consider: 1) Can incentives promote healthy behaviors in the long-term that are substantial to improve health outcomes? 2) Are the programs cost effective? 3) How can states develop multi-sector strategies that align incentive programs with strategies that address social determinants that impose barriers to individuals trying to adopt healthy behaviors? 4) How might states finance this alignment? Although these questions remain, states are natural laboratories to test and evaluate incentive strategies that have potential to improve population health, experience of care, and control.

For additional information on states’ efforts to incentivize healthy behaviors in Medicaid, please go to this MACPAC Issue Brief.

[1] To learn about HIP prior to Medicaid expansion, please visit this KFF Fact Sheet.
[2] The Lewin Group, Inc. Healthy Indiana Plan 2.0: Interim Evaluation Report.
[3] Blumenthal et al, 2013