Medicare "Better Health Rewards" Program

Saving Medicare Money, Saves You Money

Discussion of saving Medicare money tends to focus on raising premiums or cutting benefits, but the best health care costs the least because it keeps you healthy.  The Medicare “Better Health Rewards” Program builds on this fact by helping seniors set and reach achievable goals designed to help them get and stay healthy.  And, unlike the current system that begins to cost more when a senior actually needs it, the “Better Health Rewards” program gives seniors who reach their health goals – and help lower overall health costs – a chance to share in the savings.

Wellness Rewards Expert Panel

Press Release | Program Summary | Text of Bill 

Benchmark, Determination of Savings, and Incentive Payments | Statements & Letters of Support | Frequently Asked Questions

Program Summary

In 2011, nearly 2.3 million seniors went to their doctor for what Medicare calls an annual “wellness” visit.  During a typical wellness visit, the doctor reviews their patient’s medical history and conducts tests to ascertain general health status, but how can seniors make use of this information?

The Medicare “Better Health Rewards” program would give Medicare beneficiaries a chance to put these wellness visits to work by participating in a voluntary, three-year wellness program.  Under the program, participating providers would use information gathered during annual wellness visits to establish achievable health goals for their participating patients.  These goals would be based on the seniors’ ‘results’ in the following target categories, which have been identified as leading predictors of future health challenges:

  • Tobacco usage
  • Body Mass Index
  • Diabetes indicators
  • Blood Pressure
  • Cholesterol levels
  • Screenings and specified vaccinations

A senior’s progress will be measured during the next two wellness visits, conducted in years two and three of the program.  At those visits, points will be awarded for achieving and maintaining certain standards within each target.  To help keep participating seniors motivated, beneficiaries earning 20 or more points will be eligible for a “Better Health Reward” paid for by the program’s savings.


Year 2

Year 3

20 – 24



25 +



Benchmark, Determination of Savings, and Incentive Payments

Funding for the “Better Health Rewards” Program is generated as participating seniors see changes – and improvements – in their health and save Medicare money.  CMS will calculate savings by deducting the actual health costs of seniors enrolled in the program from their “projected” health costs absent the program. 

Statements and Letters of Support

America's Health Insurance Plans (AHIP), Karen Ignagni, President and CEO

"...Our members support the goals of your legislation, its focus on encouraging healthy behavior among Medicare beneficiaries, and its emphasis on preventive health care services...Thank you again for addressing this critically important issue. Incentivizing healthy lifestyles and promoting the use of preventive health care services are goals we all share..." [Full text of letter: PDF, download]

Baylor Health Care System, Joel T. Allison, FACHE, President and CEO

"The 'Better Health Rewards' bill that you and Senator Portman have introduced has great promise to lessen Medicare costs by decreasing the burden of chronic disease. I know that any process that has the potential to substantially improve health while reducing the cost of Medircare could do good for all of us." [Full text of letter: PDF, download]

Care Continuum Alliance

"...We applaud the important opportunities developed through this legislation that encourage Medicare beneficiaries to participate in a program emphasizing and rewarding wellness and health promotion...The Medicare Better Health Rewards Program Act of 2012 represents an important step for Congress in recognizing these achievements, bolstering further industry innovation and formally codifying the value of these programs..." [Full text of letter: PDF, download]

Cleveland Clinic, Toby Cosgrove, M.D., President and CEO

"Transforming the delivery of healthcare in this nation from 'sick' care to 'health' care takes commitment. I applaud the efforts of Senators Wyden and Portman to bring this issue to the forefront. We need to reduce the burden of chronic disease in the U.S., which accounts for 40 percent of premature deaths. Focusing on healthy behaviors will go a long way toward creating a healthier nation."

Cooper Clinic Preventive Medicine, Kenneth Cooper, M.D., MPH

"...Having worked in the field of preventive medicine and wellness for over 40 years, I know that any process that has the potential to substantially improve health while reducing the cost of Medicare could help all of us both personally and financially. So I, along with over 700 staff members of the Cooper Clinic/Cooper Aerobics Center in Dallas, strongly support this legislation and would like to have my representatives support such a measure..." [Full text of letter: PDF, download]

Healthcare Leadership Council

"...The Better Health Rewards Program legislation will align incentives to encourage Medicare beneficiaries to take greater advantage of existing prevention offering prescribed by the Patient Protection and Affordable Care Act (PPACA). With this bill, the new Medicare annual wellness visit becomes a powerful platform to empower patients to make lifestyle improvements that will result in better health outcomes..." [Full text of letter: PDF, download]

Healthcare Leadership Council, Mary R. Grealy, President

“Slowing the escalation in chronic disease is essential if we are to maintain affordable, accessible healthcare.  We can and must achieve better health among American seniors, many of whom have one or more chronic illnesses,” said Healthcare Leadership Council president Mary R. Grealy.  “Advancing wellness and disease prevention requires a combination of private sector innovation and thoughtful legislation such as the Medicare Better Health Rewards Program Act.  We’re making progress, but that progress needs to be accelerated.”

Deepak A. Kapoor, M.D., President of the Large Urology Group Practice Association and Chairman and CEO of Integrated Medical Professionals, PLLC

“We sincerely appreciate and strongly support Senator Wyden's bipartisan effort to ensure that Medicare beneficiaries continue to have access to life-saving screening for prostate cancer and other diseases through the proposed ‘Better Health Rewards’ program.  We also appreciate Dr. Underwood's work to illustrate how prostate cancer screening is vital to the health of underserved and minority populations, and how this program can help ensure access to those patients who are at greatest risk from this disease.”

Oregon Health & Science University (OHSU), Jeanette Mladenovic, M.D.

“Promoting creative ways to reduce chronic illness, to encourage physical activity, and to incentivize healthy nutrition, as suggested by the Medicare Better Health Rewards Program Act, makes common sense.  Wellness programs that promote healthy life styles are also an excellent way to keep seniors engaged which we know helps maintain cognitive function.”

Preventive Medicine Research Institute, Dean Ornish, M.D.

"The 'Better Health Rewards' bill that you and Senator Portman have introduced has great promise to lessen Medicare costs by decreasing the burden of chronic disease. As you know, health care costs have reached a tipping point. Providing significant incentives in this bill for Americans to develop healthier lifestyles is likely to provide better care at lower costs—and the only side-effects are good ones..."

Scott & White Healthcare

"Senator Wyden, thank you very much for taking the initiative in promoting a program that emphasizes incentives for patients to minimize or eliminate unhealthy behaviors from their lifestyle. This benefits not only the patients and their families, but our entire U.S. healthcare system. It recognizes that the patient should be actively engaged in their health and designing a reward system to recognize their active engagement is an appropriate health policy change for the Medicare program." [Full text of letter: PDF, download]

Additional Supporters Include:

  • Dr. Mehmet Oz
  • Dr. Mark Hyman, The UltraWellness Center
  • Joel Allison, President and CEO, Baylor Health Care System
  • Dr. Molly Coye, Chief Innovation Officer, UCLA Health System

Frequently Asked Questions

Q: Will Medicare beneficiaries be required to participate in the Better Health Rewards program?

A: No. The Better Health Rewards Program is completely voluntary, both for seniors who choose to participate and health professionals overseeing their progress.

Q:  How does the Better Health Rewards program work?

A:  When a senior goes to their Annual Wellness Visit, they can elect to participate in the program.  In year one, those Medicare beneficiaries choosing to enroll will be assessed on each of the following six standards: tobacco use, body mass index, cholesterol levels, diabetes screening, blood pressure, and vaccinations.  Once a senior’s health status has been ascertained, their doctor will work with them on a plan to get each of their indicators into a healthy range.  During subsequent Wellness Visits at the end of years two and three, Medicare beneficiaries will receive a point score based on their progress and success in reaching their health care goals.  Beneficiaries who receive at least 20 points (out of 35) would be eligible for a “Better Health Reward” of up to $200 after the 2nd year and $400 after the 3rd year. 

Q:  Does a senior get penalized for not achieving the program’s targets?

A:  Absolutely not.  The “Better Health Rewards” Program only offers positive incentives for those who improve or maintain good health.  There are no penalties, or “sticks,” for those who do not.

Q: Why financial incentives?  Isn’t getting healthy reward enough?

A:  Anyone who has ever gone on a diet or started an exercise program knows that sticking with it is hard regardless of the health benefits.  The Better Health Rewards program helps seniors stay motivated by giving them something to work towards.  And since getting healthy means seniors will cost less to insure, it’s appropriate for seniors to get back a little of what they pay Medicare in insurance premiums.

Q: What about beneficiaries who are not able to physically participate or for whom it is medically inadvisable to attempt to achieve the standards for the reward?

A:  The goal of the “Better Health Rewards” Program is to incentivize positive behavioral changes for America’s seniors through the use of positive financial rewards.  Progress is assessed and determined by a senior’s health care provider and not a federal agency.  Therefore, if a health care provider determines that a senior did the best they could to improve their health, that senior should be eligible for some incentive.

Q: How did you determine the target categories?

A:  The Centers for Disease Control and Prevention (CDC) said it best in the “Power of Prevention” 2009 report.  In it they state, “As a nation, more than 75% of our health care spending is on people with chronic conditions.  These persistent conditions – the nation’s leading causes of death and disability – leave in their wake deaths that could have been prevented, lifelong disability, compromised quality of life, and burgeoning health care costs.”   These targets were chosen to specifically go after the influx of chronic disease.

Q: How are the standards set within each target category?

A: The Secretary will consult with one or more nationally recognized health care quality organizations and may consult with physicians and other professionals experienced with wellness programs.

Q: And what about the points?

A: The Secretary assigns points to each category, not to exceed 5.

Q: How is this paid for?

A:  The Secretary of Health and Human Services (HHS) would use historical claims data to establish a Medicare spending benchmark for all beneficiaries enrolled in the “Better Health Rewards” program.  At the end of each program year, CMS will determine what the ‘actual’ versus ‘projected’ total spending was for those participating.  If actual expenditures are lower than those projected, the “savings” are will be shared between CMS and program participants who improved their health.  If incentive payments made during the year exceed the estimated savings, funds will be transferred from the Prevention and Public Health Fund of an equal amount of the excess to the Federal Supplementary Medical Insurance Trust Fund.  

Q: Why do you believe this program will save Medicare money? (Do you have a CBO score?)

A:  In recent debates over prevention, the emphasis has always been about adding benefits and then scoring the impact of those new services and the utilization they could create as a result.  The Medicare “Better Health Rewards” Program turns the debate on its head.  This time, the benefit has already been paid for.  Currently, providers who deliver the Annual Wellness Visit receive Medicare reimbursement, and the beneficiary receiving the visit pays nothing out of pocket.  With the “Better Health rewards” Program, the story doesn’t stop there.  Now, with a plan in hand to address concerns raised by their provider during the Annual Wellness Visit, seniors are empowered to change their behavior, and better yet, are incentivized to do so.  If, a year later, that senior has not seen any change, there’s no penalty.  They still get the visit without a co-pay, and the provider continues to be reimbursed.  If, however, they have made improvements in the areas that have direct correlation to increased chronic disease, then they are eligible for an award.  By saving the system money through living a healthier life, that senior gets to share in that savings.

Saving Medicare Money, Saves You Money