Federal and state governments are under increasing pressure to limit Medicaid spending without negative health consequences. We examine a unique policy effort in West Virginia aimed at reducing spending and improving health through personal responsibility and preventive care. These efforts show promise for reducing emergency-room (ER) visits among those who chose the personal-responsibility plan but had the unintended consequence, at least in the short run, of increasing visits for those who defaulted into the plan with reduced benefits. Overall, the results suggest that a focus on diagnostic and preventive services reduces ER visits, and these types of redesigns might result in longer- term costs savings, particularly among children. However, plans that restrict benefits, specifically benefits for prescriptions and mental health services, may increase costly ER visits in the short term for children and adults.
A not-for-profit health and tax policy research organization.
