Last week, MOH announced that, as part of its new expanded Washington State Medicaid contract, it would be offering AMZN Prime memberships to its 780,000 Medicaid enrollees in 39 counties in Washington State as part of a two-phase effort to address what are known as social determinants of health.
In the first phase of the program, MOH will offering free Prime memberships to its Medicaid enrollees for 90 days, after which the price will increase to $5.99 per month. In the second phase, MOH will transition its healthy rewards program to AMZN gift cards.
The intent of the program is to encourage healthy habits like good nutrition through free delivery of products from AMZN. MOH is also exploring ways to encourage certain purchases through rewards programs that would be managed at the point of sale.
MOH is encouraging enrollees to use the HealthinHand app to enroll in the program which will, as the program is implemented, permit greater integration between the rewards program use of the Prime membership.
The program is a direct result of Washington’s revised Medicaid program, approved in 2017, that focuses more on preventing disease by encouraging behaviors like good nutrition and exercise. Washington’s effort has received the full-throated approval in the other Washington. The Administrator of the Centers for Medicare and Medicaid has placed an emphasis on making Medicaid funding available for encouraging improvements to social circumstances like inadequate housing and poor nutrition.
In addition to finding some new, federally and state subsidized customers, AMZN benefits politically by offering positive social change. The goodwill generated by their participation – and we assume they are bearing some of the costs – offers some modest inoculation against the 2020 campaign rhetoric focused on dismantling the tech titans.
The approach is not without some flaws. Enrollees must have a debit or credit card, which implies a banking relationship. In Washington State, 18 percent of households making less than $15,000 a year, and thus potentially eligible for Medicaid, have no banking relationships according to the FDIC 2017 survey. That figure falls to 10 percent for households with incomes below $30,000 but above $15,000.
The program also carries with it some political risk. An AMZN prime membership gives access to a wide range of products and services. Although the Prime membership provided (indirectly) by Medicaid is only valuable for discounts and free shipping, headlines about entitlement program support of video purchases could present a public relations problem in the future.
Nonetheless, MOH and AMZN’s collaboration represents really sound policy. There is a raft of academic and clinical evidence in support of the strong connections between lifestyle choices – diet, exercise, stress burdens – and health.
If the program is successful, it opens up new markets funded by the ever sticky government contracts, for AMZN.
Call with questions. If you are a retail analyst, welcome to health care!
Emily Evans
Managing Director – Health Policy
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