Early Returns From Iowa’s Health and Wellness Plan: Are Healthy Behavior Programs Working?

Being healthier is a good thing, so it’s appealing for policymakers to insert the issue into their Medicaid expansion debates but so far healthy behavior programs set up by states for their Medicaid beneficiaries are producing more talking points and red-tape than results. It’s still early  though, so we will keep watching, but count me among the skeptics.

As my colleague, JoAnn Volk, recently blogged about, these types of experiments haven’t worked in the private sector either but that has not stopped Governors and state legislators from ignoring the evidence and going full speed ahead.

Case in point – Iowa’s Health and Wellness Plan

Iowa’s Medicaid waiver plan allowed the state to start charging premiums in 2015 (the second year of implementation of Iowa’s expansion) after giving enrollees a year to engage in the desired “healthy” behaviors (in this case defined as getting a physical or wellness exam and taking a health risk assessment online or on the phone). If enrollees completed those two activities in 2014, their premiums would be waived when premiums started in 2015.

It is important to note that while healthy behavior programs may be a long shot with respect to changing behavior, it is certainly far preferable for such approaches to be structured around incentives than punishments, i.e. carrots rather than sticks! I suppose you would call Iowa a carrot since premiums are waived for those that engage in the “healthy behaviors” although a true carrot would actually be a cash reward.

Recently, the state’s interim Medicaid Director presented some early returns to a legislative committee – you can see the full presentation here. Enrollees have 12 months from enrollment to complete both healthy behavior requirements, and as of December 26th 2014, only about 15 percent of enrollees have done so, according to the state’s data.

That is not a terribly robust response – it looks like the vast majority of enrollees will have to start paying premiums. One obvious problem is that the state did not send the first letter about the new program until the end of May 2014. Hard to get brownie points if you don’t know how you are supposed to go about earning them. It was not until the end of July that a small number of beneficiaries completed both activities, according to the state’s data.

The state did further outreach in October and December and by January 2015, the trend line was certainly up considerably for completing both behaviors. Unfortunately the state began informing members that they would have to start paying premiums in January, and has already posted the notices it will send to enrollees informing them that they will start receiving bills for their premiums. And while the state had claimed that everyone would have a year to complete the behavior requirements before premiums kicked in, early enrollees were not even informed of this option until 5 months into that year (in the absolute best case scenario). That is unfortunate because as we have said time and time again, premiums are a barrier to enrollment for low-income populations.

This illustrates one of the problems with healthy behavior approaches. Incentive structures rely on the assumption that individuals are fully informed of the options they have and will be able to act on this information in a timely way AND because they are responding to the incentive structure. But that is not always a sound assumption!

In focus group research I conducted on Florida’s healthy behavior program several years ago, I found that most beneficiaries had no idea that the state was trying to incentivize them to get their child in for a well child exam (among other things) —most were doing so anyway because they knew it was the right thing to do – and for school-aged children they needed to do so for school enrollment purposes.

In Iowa’s case, one can hope and assume that going forward the state will do a better job of informing enrollees of this option. But early returns do not bowl me over – and they underscore the need to keep a close eye on how residents are faring in Iowa’s new program…

Joan Alker is the Executive Director of the Center for Children and Families and a Research Professor at the Georgetown McCourt School of Public Policy.

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