By skyforbes 
According to CMS, 75M Americans are currently enrolled in Medicaid. These programs are administered separately by each state and receive varying degrees of subsidy from the federal government. Over 40% of Medicaid members are children and 12M are dual eligible (Medicare Advantage “MA” + Medicaid). The combined spent on Medicaid is $610B annually, in contrast with Medicare which has an $800B budget covering 44M lives.
Venture capitalists have poured billions of dollars to turbo charge the next generation of MA companies who manage the care of 24M Medicare members on behalf of the government. Because Medicare is centrally administered, the new entrants are able to more quickly demonstrate their value through scale and product uniformity. Companies like Clover Health, Devoted Health and Alignment Health have all made significant progress elbowing their way into this lucrative market bringing unique approaches to the market with impressive results.
Since Medicaid is administered separately by each state without a centralized “design”, disrupting the sector is a much tougher climb. That said, some well capitalized companies are now coming into the ring for a fight to increase both quality and access. The promise is to upend the existing Managed Care Organizations who directly contract with Medicaid and manage 70% of its beneficiaries.
Brooklyn-based Cityblock Health which has raised over $500M from Google and others, is considered a true pioneer in the new Medicaid space. The company focuses on the most vulnerable and underserved communities. Cityblock leverages technology, particularly virtual care and predictive modeling to reduce ER and hospital visits. Circulo, which recently printed $50M in funding, is another player we should be watching. The company’s technology is based on Olive’s RPA platform, a newly minted unicorn in our industry. Another company, Pair Team provides an end-to-end enablement solution through its digital front door so clinics can look after Medicaid patients profitability.
It is gratifying to see that investors are willing to underwrite the risk in this traditionally under-loved market. These investors appreciate the magnitude of the need for better care for our most disadvantaged population. They also know that we can put innovation on a path that can bring better care to the adults and children under Medicaid whilst building for-profit businesses. After all, good health is the center of human flourishing and we should all enjoy its gifts!