On Monday, September 30, the Centers for Medicare and Medicaid Services (CMS) announced that the agency will allow states to request to implement health-contingent wellness programs in their individual markets. As part of a demonstration project, CMS will allow 10 states to apply for permission to implement these programs. Health-contingent wellness programs require participants to achieve specific health outcomes to receive a reward, which commonly takes the form of reduced premiums. These are different from participation-contingent wellness programs, which simply require participation in an activity to receive a reward. Health-contingent wellness programs have historically not been allowed in the individual market, but participation-contingent wellness programs have been allowed since 2013. To be eligible to implement one of these programs, CMS will require that states demonstrate that the wellness programs will not result in individuals losing health coverage or increased costs to the federal government.
Health-contingent wellness programs can have a positive impact on some enrollees’ health, but they can be discriminatory. For enrollees with disabilities and chronic conditions, it may be impossible for them to achieve the health outcomes that are required to receive premium reductions or other incentives. CMS has declared that states must provide a reasonable alternative for enrollees who cannot achieve the desired outcomes due to a health condition, yet the agency hasn’t provided examples of what those alternatives could be. Without strong oversight from the federal government, the expansion of these programs could lead to enrollees with pre-existing conditions being excluded from health-contingent wellness programs and responsible for higher premiums than other enrollees. A study published in JAMA earlier this year concluded that wellness programs do not have a positive impact on enrollees’ health and economic outcomes.