1. In the Media
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THE NEW OBAMACARE ECONOMY
By E. Tammy Kim
Photo: Stock4B/Getty
07/21/2016
Business is brisk for consulting firms and others who help
employers take advantage of insurance subsidies to
comply with the Affordable Care Act.
The employees of Hope Haven, a nonprofit organization in
Burlington, Iowa, provide services to some five hundred
people with intellectual and physical disabilities, often in their
clients’ homes. Depending on the day, they can be called
upon to work as companions, cleaners, readers, personal
shoppers, cooks, or bathers. “We have situations where we support people twenty-four hours a
day,” Bob Bartles, Hope Haven’s executive director, told me. His staff members perform intimate
labors of compassion, yet, as low-wage workers, they, too, are a vulnerable class. “Our entry
wage is $11.25 per hour,” Bartles said. “We’re about ninety-per-cent funded by the government.
Most of that is Medicaid, and Medicaid doesn’t set rates that allow us to pay much more.”
Bartles has also struggled to offer a decent health-care plan to his workers, in compliance with
the Affordable Care Act’s employer mandate. The best he could find, given Hope Haven’s
financial constraints, came with co-pays and a high deductible, plus extra fees for vision, dental,
and family coverage. Even then, it cost the organization nearly eight thousand dollars per person
per year. So Bartles took note in 2014, when Iowa joined a slim majority of states that expanded
Medicaid, under the A.C.A. Suddenly, Medicaid was available to a larger segment of the working
poor—those with incomes up to a hundred and thirty-eight per cent of the federal poverty level,
or about thirty-three thousand dollars for a family of four.
Around the same time, Bartles heard about BeneStream, a company founded in 2011, in New
York City, that specializes in transferring eligible employees onto government health insurance.
For a fee, BeneStream would screen interested staff members, analyzing their household
earnings, assets, and family composition. Workers who qualified for Medicaid would have no co-
pays, no premiums, and full coverage for the entire family—an option far superior to what Hope
Haven could offer. The nonprofit, for its part, would save tens of thousands of dollars, freeing up
the budget for new hires. Since Hope Haven signed up with BeneStream a few years ago, Bartles

2. In the Media
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said, his staff has increased by fifty per cent, while the organization’s health-care costs have
remained steady. “The agency wins. The employee wins. No one loses.”
BeneStream was founded by Benjamin Geyerhahn, a former health-care consultant. After the
Affordable Care Act was enacted, in 2010, he glimpsed a startup opportunity in Medicaid
expansion, which at the time was mandatory for every state. (A 2012 Supreme Court decision
made it optional.) Ideally, low-income people would apply for Medicaid on their own, but the
process is complicated, involving tedious paperwork, pay stubs for the entire household, and in-
person renewals—a challenge for low-income families who often face irregular working hours and
do not have paid leave. “The people we find who are most in need don’t know they’re entitled to
these benefits,” Geyerhahn said. Those who qualify are concentrated in low-wage sectors, such
as retail, hospitality, food manufacturing, and home-health and long-term care, and are often
among the forty-three million Americans burdened with medical debt.
A BeneStream representative told me that the company has helped nearly nine thousand people
obtain government health insurance in the thirty-one states, plus Washington, D.C., now availing
themselves of Medicaid expansion. It expects to earn three million dollars in revenue next year,
and intends to grow by doing business with large unions that are eager to reduce costs and
improve their members’ coverage. Darwin Camacho, a thirty-one-year-old garage attendant and
Teamsters Local 272 member from New York, told me that he switched to Medicaid this spring
with BeneStream’s help. Camacho, who is married and has a three-year-old son, earns eleven
dollars per hour. He had long been on the health plan offered by his union, but, he told me, there
were too many co-payments. “Everybody is struggling in this country at the moment,” he said.
“Only rich people can feel they are very fine.”
Camacho’s comments speak to BeneStream’s peculiar position in the ideological battle over
public health care. It is a for-profit company whose business model shifts costs onto taxpayers.
But, by enlarging the population enrolled in government plans, it highlights the inadequacy of
private-sector insurance. Geyerhahn markets BeneStream as a social enterprise that advocates
for employers, employees, and Medicaid alike. Employers, he said, “ought not to have to bear the
cost of health insurance.” This moderate view has helped BeneStream draw support from both
venture capitalists and philanthropists. The Ford Foundation was an early funder, and Andy Stern,
a former president of the two-million-member Service Employees International Union (S.E.I.U.),
sits on the company’s advisory board.
BeneStream is also part of an emergent “Obamacare economy.” Larry Levitt, a senior vice-
president at the Kaiser Family Foundation, told me that health-care-software and consulting firms
such as GetInsured, Manatt Health Solutions, and McKinsey are doing brisk business advising
employers on how to take optimal advantage of the A.C.A. marketplace and insurance subsidies.
Like these companies, BeneStream and its rival Med Enroll, which focus on the Medicaid-

3. In the Media
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expansion provision, are profit-driven. But, should they succeed in moving tens of thousands of
low-wage workers onto Medicaid, they could influence the long-standing debate over public and
private approaches to health care.
Nearly a century ago, corporations like Eastman Kodak and Sears, Roebuck established a
tradition of welfare capitalism in the U.S., by providing doctor’s visits, time off, and recreation to
loyal, lifelong workers. Around the same time, reformers attuned to the needs of the poor,
unemployed, and elderly began the call for a national health system—a cause that various
Presidents took up in the decades that followed. Their opponents, including the American Medical
Association, have fought back in remarkably consistent terms. As Jill Lepore wrote in a 2012
feature for the magazine, after President Harry Trumanproposed a federal health program funded
by a payroll tax, an operative hired by the A.M.A. told a group of doctors, “Hitler and Stalin and
the socialistgovernment of Great Britain all have used the opiate of socialized medicine to deaden
the pain of lost liberty . . . compulsory health insurance, if allowed to spread to our New World,
will mark the beginning of the end of free institutions in America.”
Nevertheless, by 1965, Medicaid and Medicare had been signed into law. Retirees and
households living in poverty were given a public option, but employer-derived benefits had long
since become the norm. American liberals, resigned to something far short of a single-payer
system, pivoted to argue that employers should pay a living wage and provide affordable benefit
plans to their employees. Recent worker campaigns, including OUR Walmart and Fight for 15,
have invoked this responsibility as a talking point, broadcasting sympathetic tales of full-time
McDonald’s workers subsisting on charitable donations and food stamps. No gainfully employed
adult should have to rely on public assistance, the logic goes.
In this light, the Affordable Care Act’s move to extend Medicaid to families living above the poverty
line represented an important step toward the public model. Geyerhahn wouldn’t tell me whether
he supported a national single-payer system, but he did say that advocates of “Medicare for All,”
as Bernie Sanders has it, should celebrate what BeneStream does. “If companies are counting
on food stamps and Medicaid as part of their business plan, it means that you will have powerful
interests in favor of those programs,” he said. And Stern, the BeneStream adviser and former
S.E.I.U. president, told methat workers in the so-called 1099 economycould offer further support.
“Obamacare and the expansion of Medicaid represent an incredible shift toward separating
benefits from employers,” he said. “For freelancers and Uber workers, this becomes a muchmore
compelling question moving forward.”
Six years after the Affordable Care Act was enacted, there is evidence that support for Medicaid
expansion is growing. Conservative Louisiana came around just this year, after John Bel
Edwards, a Democrat, succeeded Republican Bobby Jindal as the state’s governor. On July 1st,
Edwards raised the state’s Medicaid income limit, embracing three hundred and seventy-five

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thousand previously uninsured residents and saving the state six hundred and seventy-seven
million dollars over the next five years. “I don’t look at this as some revolutionary thing,” he said.
“This is just the right thing to do.” President Obama echoed this point last week, in an article
published, ironically, in the Journal of the American Medical Association, that longtime foe of
public health care.“The nation typically reaches its greatest heights when we find commonground
between the public and private good and adjust along the way,” he wrote. “That was my approach
with the ACA.” It’s BeneStream’s approach as well.