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Michigan 2nd State to Roll Out Health Reward Program – But Let’s Take It Further

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Following the state of Iowa, Michigan became the second state to roll out a state wide health reward program that rewards Medicaid enrollees with financial rewards for certain health behavior.

“There is a heavy consumer engagement piece in this, both in terms of finances and skin in the game, but also in terms of healthy behaviors and really trying to find ways in which we can make the population of Michigan healthier,” Michigan Medicaid Director Stephen Fitton said in a briefing in Washington earlier this month. “We have a high obesity rate in Michigan. We don’t do very well on some broad [health] measures and we are really looking for ways to move the needle there.”

Enrollees with incomes above the poverty level who fill out health assessment forms and commit to healthful practices can reduce their premiums by half. Individuals with a $12,000 income, for instance, could cut their annual premium of $240 to $120.

Enrollees with incomes below the poverty level won’t pay a premium though they are eligible for a $50 gift card if they complete their assessment form and agree to improve their health.

States, who are facing increased Medicaid enrollment and the potentially large unfunded healthcare liability that accompanies the growth, are realizing what the employer community realized a long time ago. If you bear the risk of the cost, you must address consumers with the techniques that can drive behavior change. While the key to rewards is to align it to the right behavior, it is certainly a start to align Medicaid enrollee behavior.

However, some doubt the cost saving effectiveness. Joan Alker, executive director of the Georgetown University Center for Children and Families, credits the state for using the “carrot approach over the stick approach,” but said there’s little evidence such incentives improve enrollees’ health.

If that is the case, why not tinker with the behaviors for which individuals are offered rewards. For example, since the cost of emergency room visits is so high and the percentage of Medicaid recipients using the emergency room unnecessarily is unsustainable, why not reward Medicaid enrollees for visiting primary care or alternative care with the immediate cost savings it would generate.  It is not the same as quitting smoking, but certainly would improve the bottom line while we try to chip away at healthcare behavior.

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