Medicaid Incentives for Preventing Chronic Disease: Effects of Financial Incentives for Smoking Cessation

To test the effectiveness of financial incentives for smoking cessation in the Medicaid population.

Secondary data from the Medicaid Incentives for Prevention of Chronic Disease (MIPCD) program and Medicaid claims/encounter data from 2010 to 2015 for five states.

Beneficiaries were randomized into receipt or no receipt of financial incentives. We ran multivariate regression models testing the impact of financial incentives on the use of counseling services, smoking behavior, and Medicaid expenditures and utilization.

Participating states provided Medicaid eligibility, claims and encounters, program enrollment, and incentivized service use data.

Participants who received incentives were more likely to call the Quitline and complete counseling sessions. Incentive receipt was positively associated with self-reported quit attempts, self-reported quits, or passing cotinine tests of smoking cessation in most programs, although results were only statistically significant in a subset. There was no systematic evidence that incentives affected health care use or spending.

Financial incentives are a promising policy lever to motivate behavioral change in the Medicaid population, but more evidence is needed regarding optimal incentive size, effectiveness of process-versus outcome-based incentives, targeting of incentives, and long-run cost-effectiveness.