The Healthy Incentives Pilot (HIP) investigated the impact of making fruits and vegetables more affordable for participants in the Supplemental Nutrition Assistance Program (SNAP). The Food, Conservation, and Energy Act of 2008 authorized funds for pilot projects to determine if providing financial incentives to SNAP recipients at the point of sale would increase their consumption of fruits, vegetables, or other healthful foods. On the basis of this legislative authority, USDA’s Food and Nutrition Service (FNS) designed HIP.
Under HIP, SNAP participants received a financial incentive for the purchase of fruits and vegetables. Specifically, for every dollar of SNAP benefits the household spent on targeted fruits and vegetables (TFV) in participating retailers, 30 cents in SNAP benefits was added back to their EBT card. TFVs included fresh, canned, frozen, and dried fruits and vegetables without added sugars, fats, oils or salt, but excluded white potatoes and 100% fruit juice.
The Massachusetts Department of Transitional Assistance (DTA) implemented the pilot in Hampden County. Located in western Massachusetts, Hampden County is a mix of urban, rural, and suburban areas with approximately 55,000 SNAP households and the lowest median household income in the State. Massachusetts, like the rest of the country, suffers from an obesity epidemic, and residents in the western region have the highest rates of obesity and related chronic illnesses in the State.
Just last week the MA DTA released findings on the Pilot Program:
- HIP increased fruit and vegetable consumption of pilot participants. HIP participants consumed almost a quarter of a cup more targeted fruits and vegetables than non-HIP participants. This 26 percent increase in consumption over non-HIP participants is both statistically significant and large enough to be nutritionally relevant.
- HIP impacts were not affected by the presence of children in the household, employment status, age, or amount of the household’s SNAP benefit. Some evidence indicated that impacts were larger for households who before HIP had more positive attitudes about fruits and vegetables.
- HIP households spent more SNAP benefits than non-HIP households on targeted fruits and vegetables in participating supermarkets and superstores—$12.05 versus $10.86 each month—an increase of $1.19 or 11 percent. HIP households earned average incentives of $3.65 each month. Average monthly purchases of targeted fruits and vegetables by HIP households were similar throughout the pilot and were less than originally anticipated.
- According to self-reports, HIP households spent $78.17 each month on all fruits and vegetables in all types of stores and with cash as well as SNAP benefits. In contrast, non-HIP households reported spending $72.02 each month, which was $6.15 (or 8.5 percent) less than spending reported by HIP households.
- HIP participants clearly responded to the price incentive and used their SNAP benefits to purchase more targeted fruits and vegetables. However, the amount of TFVs they purchased with their SNAP benefits in HIP participating stores was insufficient to account for their entire increased intake. This suggests that HIP affected consumption through other mechanisms as well, such as informational and attitudinal effects, and may also suggest an incomplete understanding of how the pilot worked.
- HIP had relatively little effect on store operations. Most retailers reported that HIP purchases were easy to process. Over 90 percent of retailers reported no change in check-out time. Few retailers reported problems during the pilot.
- HIP might have induced retailers to increase their supply of fruits and vegetables to attract HIP households, but only a minority of retailers reported such changes during the pilot.
- HIP increased SNAP redemptions at Hampden County retailers due to the incentives earned, but because incentive earnings were small, the impact on retailer sales was also small. Most SNAP spending occurred in supermarkets, superstores, and grocery stores, and HIP participating retailers in these categories experienced the HIP-related spending increase.
HIP was an innovative and complex project. With these results it would be something that could be considered to replicate not only across the Commonwealth but for other States. The experience in Hampden County demonstrated that HIP was both technically and operationally feasible. Projected start-up costs to expand HIP nationwide are estimated to be $89.8 million. The projected value of incentives with nationwide expansion, based on plausible scenarios about SNAP households’ fruit and vegetable spending, ranges from $0.8 billion to $4.5 billion annually.