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Fact Sheet
October 2013

Key Differences between Wellness Reward/Penalty Programs and Value-Based Insurance Design

As a state policy maker or advocate, have you wondered what research shows about how to design health insurance plans to make them more effective for consumers? This piece compares and analyzes two types of health insurance models that insurers are implementing to lower health care costs and to encourage consumers to play a more active role in their health care.

This fact sheet explains the key differences between the two models—wellness reward/penalty programs and value-based insurance design. Wellness reward/penalty programs give people financial incentives to participate in health improvement activities or to meet health goals. Value-based insurance design reduces costs for the consumer by cutting copayments or co-insurance for high-value drugs and services—those proven to be effective while providing the best value.

Learn why value-based insurance design is better for consumers: Research shows that, with value-based insurance design, patients see improved access to health care services and are more likely to follow prescribed medical treatments. On the other hand, data show that reward/penalty programs do not help consumers make long-term improvements to their health and may even create barriers to care.