How One Company Is Making Millions Off Trump’s War on the Poor

Source: Tracie McMillan, Mother Jones, January/February 2019

President Trump plans to make the poor work for Medicaid and food stamps. That’s extremely punitive for them—but highly lucrative for companies like Maximus. ….

…. Missing from the debate—perhaps because there’s hardly been any reporting on the subject—is the fact that work requirements are also a profit center for a rapidly growing private industry. Exhibit A is Maximus, the company that helps run HIP and the bureaucracy that stands between Sue and insurance. Business processing behemoths like Hewlett-Packard and IBM often run the minutiae of public-benefit paperwork and accounting. Local nonprofits sometimes contract for services like job training and case management. But Maximus does it all, holding contracts for everything from job training to child support enforcement to health care enrollment. In a 2014 business presentation, the company claimed to have a hand in the cases of roughly 59 percent of America’s Medicaid clients. ….

…. As workfare programs began to sprout up nationwide, Maximus capitalized on the doublespeak. The big payoff came when Clinton signed welfare reform into law with the Personal Responsibility and Work Opportunity Recon­ciliation Act in 1996. Welfare agencies told clients to start looking for employment if they wanted to keep cash assistance; if they couldn’t find a job, the state would try to give them work to do. Sue, then a young, single mother, first went on welfare that year.

The following year, Maximus went public, posted rev­enue of $128 million, and told investors that far greater profits were to be found in the social safety net. In its annual report, Maximus laid out its targets: 6.5 million people on Supplemental Security Income (which goes mostly to people with disabilities), requiring $2 billion in administrative spending a year, and 28 million people on food stamps at $3.7 billion in overhead. Between those, plus Medicaid, welfare, disability assistance, and child support, Maximus was eyeing a $21 billion market serving about 100 million people. …