Are Carrots Good for Your Health? Current Evidence on Health Behavior Incentives in the Medicaid Program

Medicaid beneficiary incentives for health behaviors have become popular in recent years, with multiple states and Medicaid managed care organizations designing incentives to target various health conditions and populations. Yet, there is limited evidence on how well these programs work, and the overall impact is mixed on whether they improve people’s health and reduce health care costs. Some incentive programs, like those targeting one-time behaviors and smoking cessation, have stronger evidence on improving health outcomes.

There are multiple operational challenges to implementing these incentive programs. Nearly every state and Medicaid managed care plan administering an incentive program underestimated the time and resources needed to establish it. These administrative challenges affect whether states are able to enroll Medicaid beneficiaries in the programs and whether the program meets its goals of improved health and lower cost.