Incentives to Change Health Behaviors: Beneficiary Engagement Strategies in Indiana, Iowa, and Michigan

As part of their Medicaid expansions to adults with incomes up to 133 percent of the federal poverty level (FPL), Indiana, Iowa, and Michigan used section 1115 authority to implement incentives for beneficiaries to use regular preventive care, change certain health behaviors, achieve personal health goals, and, in some cases, build awareness of health care costs. Each demonstration has a distinct set of encouraged behaviors and corresponding rewards, which are collectively termed “beneficiary engagement” strategies.

Managed care organizations (MCOs), which provide care for at least part of each state’s expansion population, support the beneficiary engagement activities specified in the states’ demonstration designs and often conduct other plan-specific beneficiary engagement activities. In addition, the states and health plans use various approaches to involve primary care providers in beneficiary engagement programs, adding a layer of complexity to program implementation. Understanding how the implementation of beneficiary engagement strategies varies by plan provides important context for assessments of the outcomes and effectiveness of these programs. For example, if outcomes vary across plans within each state, it will be useful to analyze whether the sources of implementation variation seem to distinguish plans with strong outcomes from those with weaker ones.

Early findings on beneficiary engagement strategies suggest that beneficiaries’ understanding of healthy behavior incentives and behavior completion rates are mixed (Miller, Maurer and Bradley 2017). Implementation experiences suggest the importance of streamlining processes for obtaining rewards and ensuring that beneficiaries receive a summary of the information about their health status and care needs that is collected through health risk assessments (HRAs) or other tools. In addition, the demonstrations highlight the potential to draw on lessons from behavioral economics in designing beneficiary communications and incentive strategies as low-cost ways to increase engagement. Officials from the three states and participating MCOs are generally enthusiastic about the possibility of using incentives to alter health behaviors.