Healthy Behavior Incentives: Opportunities for Medicaid

Financial incentives offer a new tool for Medicaid programs to encourage beneficiaries to choose healthy behaviors. Programs serving non-Medicaid populations have demonstrated that financial incentives can help influence healthy behaviors, enhance long-term health outcomes, and reduce health care costs. Several states are considering incentive strategies within new Medicaid expansion programs. This brief explores how financial incentives can be used to influence healthy behaviors. It reports on findings from past Medicaid healthy behavior incentive programs; highlights current Medicaid incentive approaches, including New Mexico’s model; and offers recommendations for states that are establishing or modifying programs to encourage healthy behaviors in Medicaid.