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Should Medicaid Incentivize Healthy Behavior?

July 1, 2013
by Dylan Scott
Governing Magazine

Critics killed an experiment in West Virginia to incentivize Medicaid patients to be healthier. Some say it's time for states to revisit such ideas if they're serious about controlling health costs.

About six years ago, West Virginia conducted an unusual experiment: It tried to encourage its low-income Medicaid recipients to be healthier. Not just seek less expensive care, but actually change their behavior. As part of a pilot program, Medicaid beneficiaries signed contracts that gave them full benefits in exchange for certain activities associated with better health, such as regular preventative screenings. Enrollees started with a scaled-back benefits package and then added more through good behavior. Better behavior, more benefits.

It was a novel idea, but the state never got to see it past the pilot stage. Opponents spoke out against the program, arguing that rather than rewarding people for being healthy, it was actually punishing others for not being well. The federal Centers for Medicare & Medicaid Services (CMS) questioned whether it was appropriate for the government to decide what constitutes a healthy behavior and whether it was wise to use state and federal dollars to promote them. So the proposal was stripped from the broader Medicaid reforms that it was a part of.

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