To determine eligibility for Medicaid coverage or tax subsidies on the health insurance exchanges created by the Affordable Care Act, states are gaining access to Internal Revenue Service data that they have never seen before. It’s called modified-adjusted gross income (MAGI), and it helps determine whether an individual or family qualifies for public insurance or tax subsidies from the federal government to pay for private coverage.
But the IRS has decided that states cannot use that data for any other state-administered programs outside the exchanges that use income as a basis for enrollment: food stamps, Temporary Assistance for Needy Families (TANF) and others.
What a tease, state officials say. What a missed opportunity.
“It’s frustrating to think about what having that good source of information could accomplish,” says Larry Goolsby, director of strategic initiatives at the American Public Human Services Association (APHSA). “I’m mystified to why this happened in the first place. Why couldn’t we have access to it? These are legitimate government operations.”
And here’s the kicker: some states hope to eventually fold their entire eligibility process for social services into the exchanges. Rhode Island, for example, has outlined a long-term plan to integrate eligibility determination for all of its human services programs into the technology platform the state is creating for its exchange. Other states are planning to achieve the same goal down the road—it’s an ideal that most state human services agencies have long been aiming for, Goolsby says.
But as things stand now, they won’t have the IRS data to do it.
“I think it’s always true that the fewer barriers you have between systems, the easier it is,” says Christine Ferguson, Rhode Island’s health exchange director, although she adds that her state has more immediate concerns in exchange planning. “There are definitely reasons why having that information available could be helpful.”
The lack of access has been a point of contention in negotiations between states and the Obama administration during exchange planning. Officials at a government IT conference earlier in September described a tense back-and-forth with the Centers for Medicare and Medicaid Services (CMS) as they struggled to understand why they couldn’t use hard federal income data that they say could help eradicate fraud and target outreach to eligible individuals who aren’t enrolled in programs designed to help them.
One state official, who asked not to be named to discuss negotiations with CMS more freely, said that the IRS has presented the data questions as a "black-and-white" issue, while CMS officials seem more receptive to the idea that states could use the information in other ways. Another part of the problem, the official says, is that the federal government is still figuring out its policies about the data (and the exchanges more generally) at the same time that the states are already trying to do their exchange planning.
"It's always harder to implement something that's not consistent across all programs. Black and white doesn't always work for human services programs," the official says. "We're ahead of their schedule, and they can't seem to speed up fast enough. In an ideal world, there should have been answers and decisions ahead of time."
The message conveyed to states during negotiations was that it would take an act of Congress to use the IRS data for other programs. The presumed argument from the federal government is that they want to protect personal information and the IRS’s reading of the ACA prohibits other uses. Requests for comment from the IRS were not returned.
Given the acrimony on Capitol Hill, especially over the health-care law, those who support using the data aren’t holding out much hope for movement in Congress. But they aren’t ruling out an organized attempt to push legislation at some point in the future either, APHSA’s Goolsby says. “It’s going to be a while,” he says, “but we’re working diligently.”