Why We Built a Business around Medicaid Enrollment

Written by:
David Moser
October 15, 2021

BeneStream was founded to address the reality that many public programs intended to alleviate poverty are underutilized. For instance, we believe that vast numbers of eligible Americans would be well served by Medicaid, but for too many, actual enrollment has remained stubbornly out of reach. So while the American safety net certainly contains some massive gaps and imperfections, there remains a dramatic opportunity to expand the impact of our welfare state simply by helping those who already meet the qualifications, and who want to enroll, to navigate the complexity of doing so.

Assisting working-class people with public benefits enrollment doesn’t obviously lend itself to a model of self-sustaining revenue to cover the costs of providing the service. Many nonprofit organizations attempt this kind of work but are limited by volunteer hours or the whims of the donor class. BeneStream has created a different path. We operate as a for-profit business. This allows us to scale to meet opportunities without going hat in hand to philanthropists. Yet we’ve never been paid a penny by the workers and families that we serve.

Our revenue comes from the employers and unions of the individuals we help. Companies and labor organizations are motivated to improve the healthcare access of their populations, and by using BeneStream’s Medicaid enrollment service as a tool to achieve this, they usually save money in the process. This is possible because millions of working Americans pay hundreds of dollars a month to cover themselves and their families with employer health insurance. Their employers usually pay similar amounts to cover their share of the monthly premiums. Medicaid offers an alternative.

Medicaid eligibility is based on the state of residence, age, income, household size, and in some cases, immigration status. There is no open enrollment period, and eligibility doesn’t account for whether an individual is already on an employer-provided health insurance plan. So people who meet their state’s criteria can enroll in Medicaid at any time, and doing so triggers a Qualifying Life Event that in turn allows them to leave their employer plan, putting their premium payments back into their paycheck and saving their employer their share as well. Even at larger companies where health plans are self-insured, and therefore there are no employer premiums, the companies see savings in the long term due to a reduction in claims cost from the Medicaid eligible population.  

So our formula is that a company pays for a service that saves employees money while providing superior health insurance, the result of which then saves the company money. It applies classic win-win incentives in a context that creates a novel opportunity to alleviate poverty. As the headlines are written and rewritten about the next piece of anti-poverty legislation that might or might not pass, we will continue to get people over the finish line of existing opportunities.