Value-based insurance design (VBID) introduces financial incentives to encourage health plan enrollees to use high-value services. Such incentives include reducing prescription drug copayments for individuals with chronic conditions to encourage medication adherence, and reducing podiatry copayments for those with diabetes to encourage regular foot checks. The goals of VBID are to improve patient health through better disease control and to save money by reducing costly complications that can occur when chronic conditions are poorly managed. The RAND Corporation is evaluating a five-year VBID model test that the Center for Medicare and Medicaid Innovation is currently implementing in the Medicare Advantage program. The evaluation will assess whether VBID can increase use of high-value services; reduce use of avoidable services; improve quality of care; and, ultimately, improve health outcomes and reduce spending.In this report, the authors estimate VBID's impact on four outcomes for which complete 2017 data existed at the time of the report's writing: awareness of the model (measured using beneficiaries' self-reports of having been offered a lower copay or additional benefits because of a health condition), enrollment in VBID plans, 2017 plan bids, and 2017 projected costs to the Centers for Medicare and Medicaid Services (CMS). The experiences of current VBID participants-including how VBID participants designed their benefits, what implementation challenges they experienced, how they surmounted these hurdles, and whether they were able to achieve a positive return on investment-might provide useful information to nonparticipants who are contemplating participation. In future reports, the authors will analyze the model's effects on other outcomes, including utilization, quality of care, and beneficiary health.

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