Four states—Arkansas, Indiana, Iowa, and Michigan—implemented policies that are intended to engage beneficiaries in their health care as part of section 1115 Medicaid demonstrations that expanded coverage. In addition, Arizona has obtained federal approval for a beneficiary engagement program that is not yet implemented. While each state’s set of engagement strategies and incentives is unique, the demonstrations share two broad goals: (1) building awareness of the costs of care, and (2) encouraging beneficiaries to change certain health behaviors. In return for considering the costs of their care and/or seeking preventive care, each state provides participating beneficiaries financial rewards and/or enhanced benefits. These implicit contracts between the state and beneficiaries can be simple or complex, which in turn demand differing levels of understanding and strategic behavior from participants to earn the potential rewards.

This brief describes beneficiary engagement strategies used by these four states and discusses the implications of incentive design and early evidence on healthy behavior completion rates for future efforts to formally evaluate demonstration outcomes. In three of the four demonstrations, less than half of eligible beneficiaries have participated in the incentivized behaviors, suggesting the need for continued beneficiary education if demonstrations are to meet their goals. Wide variation across states in the time lapse between completing incentivized behaviors and receiving the associated rewards—ranging from a month to a year or more—also offers the opportunity to validate whether more immediate rewards yield the most change in desired outcomes, the result predicted by economic theory. The national evaluation will explore these questions of participation and reward timing in greater detail, and will assess evidence of beneficiary understanding of incentives and potential unintended consequences to inform states’ ongoing efforts to engage Medicaid beneficiaries in their health and health care.