How Health Care Incentives Are Saving Money in Kentucky

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Between 2008 and 2011, Kentucky increased the amount that state employees could contribute to their health insurance by 55 percent. However, by 2012, the average total premium for an employee and dependents was still over $1,200 per month. To control costs, Kentucky then increased deductibles in two of their more popular plans—achieving some cost control but also increasing employee out-of-pocket costs, an unpopular move.

Kentucky state officials searched for new approaches to keep health care costs under control while lessening the burden on state employees, a win-win for both the state and its employees.

In 2013 and 2014, as Kentucky prepared to launch their new incentive program, state officials formed a cost reduction strategy around the idea of educating members about health care costs. The state ultimately selected Vitals SmartShopper, a technology-enabled third-party service, to empower KEHP members with the ability to shop for health care and keep part of the savings.

Not only does the Vitals SmartShopper program yield short-term benefits, it might also lead to long-term benefits for Kentuckians in the form of lower health care prices.