As a massive omnibus makes its way through the US Congress amid massive cuts to government programs, care-adjacent fintechs weigh their options–and futures
In its current iteration, the “One Big Beautiful Bill Act” — an all-encompassing omnibus projected to add $2.4 trillion to the US budget deficit over the coming decade — includes substantial cuts to Medicaid to the tune of $800 billion, while boosting individual incomes for the top 0.1% of earners by an estimated $400,000 through substantial tax cuts. While House representatives grapple with the actual contents of the bill they voted for (including heavy-handed wording that prevents states and local governments from regulating AI), and as the Senate debates the future of popular programs like Medicare and Medicaid while voting on their own version of the bill, fintechs focused on the caregiving space are preparing for the bill’s worst potential — while eyeing potential opportunities for austerity-spurred growth.
Jason Resendez, President and CEO of the National Alliance for Caregiving, a caregiving-focused alliance that includes major pharmaceutical, medical, and insurance organizations as its members, told Fintech Nexus that community- and home-focused benefits programs are often “the first programs that get cut when states need to make decisions with less funding from the federal government.”
“Those are things like transportation, in-home health assistance, and nutrition support, where there are some innovative partners and managed care plans that partner with either tech startups or established companies in communities or social service providers; that will all be at stake with these cuts,” Resendez said.
One firm working to chart a course through the uncertain future for these services and advise their portfolio companies accordingly is Magnify Ventures, a Los Angeles-based venture firm backed by Melinda French Gates’s Pivotal Ventures. Magnify’s $52 million fund focuses on startups tackling the estimated $648 billion care economy — investing in companies building digitized healthcare platforms, estate settlement solutions, and more.
Fintech Nexus spoke with Julie Wroblewski, Co-Founder & Managing Partner of Magnify, about how fintechs and other tech providers can build around use cases affected by public funding volatility and attendant insurance reimbursement frameworks in the current climate. She suggested this current wave of care-focused solutions has learned hard lessons from predecessors’ failures and is “not building for a revenue stream.” Unsuccessful tech companies built around Medicare supplemental benefits, for instance, and saw those funds disappear over the past couple of years as Medicare plans consolidated.
“As an investor, we think: Are you actually improving patient outcomes and reducing costs? Are you building for a reimbursement code that could potentially go away? That’s how we talk about it to founders,” Wroblewski said.
One such portfolio company is Magnolia, a Seattle-based platform supporting home caregiving provided by family members. Deploying capital from its 2024 Seed round, which raised $3.5 million from the likes of Village Global, Tokio Marine Future Fund, in addition to Magnify Ventures, Magnolia offers diagnostic services for an ailing family member, as well as a personalized training and support regimen for their caregiver(s). The startup’s stated aims are to “improve the quality of life for all those affected by chronic conditions” and to “dignify family caregiving as a pillar of the healthcare system.” Its revenue comes from insurance reimbursements as well as fee-for-service payments.
Magnolia’s founder and CEO, Liz Tarullo, told Fintech Nexus that the Centers for Medicare & Medicaid Services’ Guiding an Improved Dementia Experience (GUIDE) program, which started during the Biden-Harris administration and which Tarullo calls “an unprecedented value-based payment [program] that is establishing a standard of care for dementia,” was a “huge tailwind” for fundraising, seen as vital for commercialization of the tech. The addition of codes to the physician fee schedule also enabled Magnolia to direct support services to family caregivers and fund family caregivers’ work.
The GUIDE program is intended to be an eight-year program, though its future is uncertain under the Trump administration. “There are companies that are in a really tough spot right now for planning … the next two or three years with that level of uncertainty,” Wroblewski of Magnify said.
For her part, Tarullo said Magnolia has been “excited about GUIDE,” but recognizes that “the healthcare system largely operates in a fee-for-service model today,” which compelled the company to intentionally pursue more than one revenue stream. With that in mind, Magnolia “quickly went into provider groups and health systems,” and is in network with the top Medicare Advantage plans. If Medicare Advantage continues to receive substantial government weight behind it, Tarullo said, “then it’s just incumbent on me to be able to serve all of those use cases.”
Distribution for caregiving-focused tech startups and fintechs depends on the acuteness of the need at hand, according to Kai Stinchcombe, Founder and CEO of True Link, which provides investment accounts and customizable pre-paid debit cards for seniors, people with disabilities, and people recovering from addiction. (These products are typically provided in collaboration with a caregiver or legal guardian.) Go-to-market for a fintech like Charlie, which connects elderly customers with specialized banking services, including more phone support and text support than a typical consumer-facing fintech, is very different from those for True Link, where family members are figuring out how to mitigate the financial risks for a parent diagnosed, for example, with Alzheimer’s. In True Link’s case, professionals like geriatric care managers suggest financial products that address caregivers’ needs, as caregivers are most likely thinking about more big-picture questions like healthcare and assisted living.
Using institutions and professionals as a conduit for customer acquisition can also confer trustworthiness in high-stakes, sensitive contexts. If a rehab center recommends setting up a pre-paid debit card that limits ATM withdrawals, Stinchcombe said, users are more likely to perceive credibility than they are through a direct-to-consumer social media ad that leads them to an application page that asks them to input their social security number. “Our growth channel happens to just be very credible,” he said, noting that the company was cash-flow positive before its 2017 Series A. (It’s raised more than $60 million from firms like Khosla Ventures and QED, and is a product of YC S13.)
True Link’s products target sufficiently diversified use cases that policy-induced swings — including changes to home healthcare reimbursement rates, according to Stinchcombe — do not significantly affect its business. “There probably is some amount of regulatory boom and bust in any one of these [use cases], but ultimately the demographics are just so inexorable,” he said.
For his part, Resendez of the National Alliance for Caregiving agrees that the demographic shift will have a massive impact — and, perhaps perversely, that the defunding of public health mechanisms and the institution of more stringent work requirements and other qualifications for programs like Medicaid will open the door for fintechs to automate applicant verification processes: limiting access to government-provided care, and entering the domain of conglomerates like Booz Allen Hamilton. “There, weirdly, could be opportunities there,” he said.
