Incentivizing Healthy Behaviors: Kentucky is Latest State to Pursue Despite Evidence it Doesn’t Work

Some ideas just keep popping up despite the near certainty that they won’t work. The recent Medicaid waiver proposal from Governor Bevin of Kentucky emphasizes the use of a rewards account where beneficiaries get points by engaging in healthy behaviors or community engagement activities to help pay for vision and dental care. This idea has been widely criticized because beneficiaries stand to lose important dental and vision services that they are currently receiving if they don’t earn rewards.

There is mounting evidence from other states that have pursued these “healthy behavior” approaches indicating that these overly-complicated programs simply do not work and unfairly penalize beneficiaries. A recent blog by my colleague Judy Solomon at the Center on Budget and Policy Priorities examines emerging evidence from Michigan and Iowa (both doing Medicaid expansion through a Section 1115 waiver that include incentive programs) that finds that few enrollees are earning rewards. In most cases, this is because the enrollees simply don’t know about them. In a complicated waiver arrangement, the likelihood of all the information being conveyed to hundreds of thousands of new beneficiaries and the providers that serve them is low.

And past experience should have led us to expect this result – our long term project analyzing Florida’s Medicaid waiver examined an “enhanced benefits rewards program”, which was part of Governor Bush’s original concept in 2005. Our study found that this program was largely unused because beneficiaries didn’t know about it – and administrative costs to run this ineffective program were high.

The Kentucky waiver proposal would add red-tape to a program this is already working well. More on Kentucky’s waiver to come in a future blog as I get back up to speed after an amazing trip to Japan.

 

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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