Unbiased Analysis of Today's Healthcare Issues

Do Incentives for Healthy Behaviors Work? A Case Study of Medicaid in Iowa

Written By: Jason Shafrin - May• 09•17

One of the primary changes in the healthcare system directed by the Affordable Care Act was providing funding for states to expand Medicaid.  Many states did so; many others did not.  Some states expanded Medicaid but put additional hurdles in front of beneficiaries to receive this coverage at no cost.  Consider the case of the State of Iowa.   A paper by Akelson et al. (2017) writes:

the State of Iowa used a section 1115 waiver to expand Medicaid by establishing its own Iowa Health and Wellness Plan (IHAWP)…the state also created the Healthy Behaviors Program…[which] was designed with four components: a wellness exam and health risk assessment for members, incentives for providers who assist members with completing their health risk assessment, incentives for members’ healthy activities and behaviors, and a premium to be paid by members who did not complete the wellness exam and health risk assessment in the first twelve months of their coverage. To meet the wellness exam requirement, members had to have an annual preventive exam from any plan-enrolled physician…The health risk assessment component required the completion of a standardized instrument…[that]…assessed members’ health and their experiences with receiving health services…”

Some would argue that this is a positive development.  If the government is providing health insurnce to individuals and is responsible for most of their health care costs, the government should incentivize individuals to engage in healthy behaviors, both to improve their health and save on the government’s bottom line.  This type of policy could be considered a productive “nudge”.  Others would claim that this just one instance of the nanny state telling people what to do.  Forcing individuals to undergo wellness visits and standardized instruments for which they may or may not what to complete is in essence devaluing the time of people on Medicaid.

Regardless of what you think of this program, there is one question we can answer: did people actually get the wellness examine and fill out the risk assessment.

The study by Akelson et al. (2017) used qualitative interviews with Iowa staff, IHAWP patients and providers, and quantitatve analysis using claims and enrollment data.

Even though completing both items was a requirement for getting free Medicaid insurance, they found that:

Overall, we found that the proportion of members who completed a health risk assessment or wellness exam was very low. Even more important, the proportion who completed both, which was required for the member to avoid paying a monthly premium in the following year, was extremely low: Approximately 83 percent of Wellness Plan members and 92 percent of Marketplace Choice members in our sample failed to complete both activities in 2014

Why did so few people do the wellness exam and assessment?  Based on interviews, most people were not aware of this program and those who were did not understand that they needed to complete these tasks to get free insurance. Further, clinicians and the managers at clinician’s facilities also often did not fully understand this program.

In short, did the Healthy Behaviors Program not incentivize healthy behaviors, it may have made people less healthy if they later disenrolled in Medicaid due to receiving bills for unexpected premiums.

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