Starting this month, firms with more than 50 employees must offer workers insurance or face fines, a new expense for some employers who until now didn’t have to offer any coverage.
But one company’s problem is another company’s opportunity — BeneStream wants to help employers shift those costs to the federal government, specifically to Medicaid.
For businesses with thin margins like those in retail and the service sector, BeneStream CEO Ben Geyerhahn said owners typically can afford to offer plans with high deductibles and co-pays.
“The employers offer plans that are expensive for the employer and expensive to the employee,” he said. “That’s a lose-lose.”
For a price, BeneStream will comb through employee rolls to see who qualifies for Medicaid, the program created primarily for low-income and disabled Americans.
“If you can get people who are Medicaid eligible off your plan, you save a lot of money,” said Geyerhahn.
He said a business can avoid up anywhere from $5 to $15,000 per employee shifted onto the taxpayer-funded program.
“The hitch,” said Bob Kocher, venture capitalist and former Obama health policy advisor, “is that it’s shifting cost from the employee and employer onto the government.”
As it stands now, businesses pay fines if their employees buy subsidized insurance on the exchanges, but not if they enroll in Medicaid.
Kocher said the Administration could easily change rules and fine companies if businesses like BeneStream take off.
“It was not ever imagined that employers would systematically try to offload their workers onto Medicaid rolls, or have software systems that go through and identify them and say you know you might get Medicaid,” he said.
Harvard’s Dr. Ben Sommers agreed. “The optics for sure are a big challenge,” he said.
Sommers leaves it to policy makers to decide if this cost shift is equitable. He said the important thing is for workers must decide if Medicaid is a better healthcare fit.
“What we do know is that people with Medicaid can be on the hook for less of their care than they would with private care,” he said.
What we don’t know, said Sommers, is whether Medicaid will offer low-income workers better care. If not, Sommers said at least workers could always re-enroll in the company-sponsored plan next year.