A Medicaid redesign by West Virginia that aimed to give recipients individual choices and responsibility had unintended consequences, according to a recent report by George Mason University's Mercatus Center.
The Mountain Health Choices program, which the state ended in 2010, was supposed to reduce the number of hospital emergency room visits for nonemergencies. But the program resulted in more Medicaid recipients seeking care at emergency rooms, the report said.
"Ultimately, this program wound up costing us money, not saving us money," House Health and Human Resources Chairman Don Perdue told the Charleston Gazette. "What's frustrating is almost everyone at the time said this was a bad idea, that it wouldn't work, but the administration at the time just refused to change course. They wouldn't even consider changing course."
"Government, even when it's bad, should be responsible for its errors," Perdue said. "In this case, it wasn't."
Implemented in 2007, the program created a two-tier system. People who committed to healthy behaviors received more benefits than what the traditional Medicaid program offered. Those who didn't received fewer benefits.
West Virginia scrapped the program in 2010 after a new federal rule went into effect requiring adult enrollments in such programs to be voluntary.
Only 14% of recipients chose the enhanced plan between 2007 and 2010. During this period, the number of emergency room visits by Medicaid recipients who chose the enhanced plan decreased by about 5%. But the overall total increased because of the low enrollment, the report said.
"Policies that limited treatment options led to the unintended consequences of increased ER visits," Gurley-Calvez wrote in the report.
Perdue said the enhanced plan was poorly advertised by the state.
"The huge problem early on was nobody knew what it was," he said.