Los Angeles Times, April 11, 2011
A federal grant program authorized in the health overhaul law is offering states $100 million to reward Medicaid recipients who make an effort to quit smoking or keep their weight, blood pressure or cholesterol levels in check. The grant program is meant to encourage states, many of which are under pressure to cut Medicaid costs, to experiment with an uncertain approach to wellness: offering incentives for healthy behavior. "Medicaid is almost the sweet spot for financial rewards," said George Loewenstein, a behavioral economist at Carnegie Mellon University who has studied the effect of financial incentives on behavior. Medicaid recipients, he explains, are economically disadvantaged and have more to gain from incentives. Loewenstein, however, is dubious about whether incentives, especially those tied to weight loss, could really work. He's not alone.