ObamaCare and Medicaid's Embarrassing Partners: Companies Helping Employees Get On Medicaid.

Crain's New York reports:

BeneStream recently raised $6.3 million in Series A financing, from investors including BlueCross BlueShield Venture Partners, the VC arm of the Blue Cross Blue Shield Association. The company has grown to 70 employees in seven states, up from only eight workers last year, and has signed up or re-enrolled 5,500 people for Medicaid. The new funding is for sales team expansion.

The company has struck partnerships with more than 30 insurance brokers, including USI Insurance Services and HUB International, which now sell Bene-Stream's products to their clients as part of a benefits package. For an employer with 1,000 workers earning less than $33,500, BeneStream's service costs $35,000 upfront and $4,000 a month to enroll existing employees, handle new hires and process all re-enrollments.

Brokers get a portion of those payments. Among them is Bob Trope, managing director at Crystal & Co. His Manhattan brokerage firm has worked with BeneStream since last year. It recently signed up its first client to use the service.

“Health insurance costs are the second biggest for many companies, after labor,” Mr. Trope said. “Anything you can do to control those costs in a way that's not just shifting them to the employee is a good thing.”

But the idea of employers seeking government assistance for their workers is controversial. Medicaid is funded by state and federal governments, and employers don't contribute to premiums as they would with commercial insurance. Some companies fret that referring workers to Medicaid might be seen as a sign that their benefits program isn't strong enough to cover all its employees, said Mr. Trope.

“The optics of it can be a hurdle,” he said.

Although Medicaid is an affordable option for employees, the coverage can make it more challenging for them to find doctors who take the insurance, said Tal Gross, an assistant professor of health policy at Columbia University.

“Medicaid is not necessarily health insurance we would all want,” he said. “That's one issue. Another is the cost is shifting to taxpayers.”

Love the quote " employers seeking government assistance for their workers is controversial." As you can imagine , a free market in health insurance wouldn't have rent-seeking companies profiting from putting people on welfare. Just a reminder.