Educating Beneficiaries About the Cost of Care: Health Accounts in Arkansas, Indiana, and Michigan

As part of section 1115 Medicaid expansion demonstrations, Arkansas, Indiana, and Michigan introduced individual health accounts designed to engage beneficiaries in their care and make them more cost-conscious consumers. Health accounts can promote several broad goals: (1) educating beneficiaries about the costs of health care; (2) facilitating incentives for certain healthy behaviors (such as the receipt of preventive care); and (3) demonstrating the benefit of making regular, predictable payments (also called contributions) instead of facing unpredictable costs when seeking care. Health accounts also share some features with Health Savings Accounts (HSAs), which offer tax-deferred treatment of savings for medical expenses to people enrolled in high-deductible commercial health plans (U.S. Department of the Treasury 2015). The three demonstrations, despite sharing similar goals, vary substantially in the design and implementation of their beneficiary health accounts. In this brief, we highlight similarities and differences among the states in how the accounts function (including the roles of states, plans,1 and providers) and in how beneficiaries experience their health accounts (including the information they receive through regular account statements). As part of ongoing implementation monitoring, our findings will inform future evaluation work on the effectiveness of these health accounts in achieving their stated goals.