BeneStream moved low-paid workers into Medicaid, shifting employers' insurance costs

NPR reported on Oasis Foods of Hillside, New Jersey, a cooking-oil and mayonnaise maker with about 180 workers. To meet the Affordable Care Act mandate it offered insurance to all employees for 2015, and the company doubled its enrollment. But about two-thirds of employees declined: premiums of roughly $350 a month for a family of four with a $2,500 deductible were too much for factory workers earning $10 to $15 an hour.

The company's insurance broker told president Duke Gillingham about BeneStream, a New York startup that facilitates Medicaid enrollment. There is no penalty for employers when workers qualify for Medicaid, which applies up to 138 percent of the federal poverty level. Founded two years earlier with seed money from the Ford Foundation, BeneStream helped more than 6,500 workers at 125 companies get Medicaid.

CEO Benjamin Geyerhahn says the firm's average saving is about 250 percent, meaning each dollar spent on BeneStream returns about two and a half in saved premiums.

Low-wage workers could not afford company premiums and deductibles, so they declined the offer.

The mandate penalty is triggered by workers buying subsidised exchange coverage, not by Medicaid enrollment.

Employers had not historically helped workers enroll in Medicaid, leaving a gap a startup could fill.

Medicaid is nearly free to employees, so they usually gain coverage they could not otherwise afford.

Compliance rules have exits: read where a mandate's penalty does not apply, and a cost can shift to another payer.

Critics such as Berkeley's Ken Jacobs said employers whose workers rely on Medicaid should contribute more, and California lawmakers rejected a state penalty on such firms. Gillingham said Oasis workers gave Medicaid mixed reviews because some doctors do not take it. He called it a fair deal given the taxes his company pays.