To examine the impact of a 2007 redesign of West Virginia's Medicaid program, which included an incentive and “nudging” scheme intended to encourage better health care behaviors and reduce Emergency Department () visits.
West Virginia Medicaid enrollment and claims data from 2005 to 2010.
We utilized a “differences in differences” technique with individual and time fixed effects to assess the impact of redesign on visits. Starting in 2007, categorically eligible Medicaid beneficiaries were moved from traditional Medicaid to the new Mountain Health Choices () Program on a rolling basis, approximating a natural experiment. Members chose between a Basic plan, which was less generous than traditional Medicaid, or an Enhanced plan, which was more generous but required additional enrollment steps.
Data were obtained from the West Virginia Bureau for Medical Services.
We found that contrary to intentions, the program increased visits. Those who selected or defaulted into the Basic plan experienced increased overall and preventable visits, while those who selected the Enhanced plan experienced a slight reduction in preventable visits; the net effect was an increase in visits, as most individuals enrolled in the Basic plan.