A Smooth Data Exchange Can Turn Tax Forms into Health Care

The critical path to success in Maryland’s new data-sharing program

Starting in 2020, Maryland’s tax return document is slated to become a portal into health insurance for many uninsured residents. The Maryland Easy Enrollment Health Insurance Program will be the first program in the nation to use income tax filing to connect people to healthcare coverage by adding a checkbox to the Maryland tax return. It was signed by Governor Larry Hogan on May 13th. Checking the box on the tax form will initiate a process of pre-eligibility determination—the relevant information provided on the tax return will be used to calculate likely eligibility for either Medicaid, CHIP, or state-subsidized health insurance through the Affordable Care Act health insurance exchange.

“Leveraging a tax return to help someone get onto health insurance is surprisingly realistic,” says SIS Senior Policy Analyst Hilary Dockray. “That’s in large part because income rules for ACA marketplace coverage and most types of Medicaid are based off of tax household information.”

According to Stan Dorn of Families USA, it is likely that an Application Programming Interface (API) would communicate data between the tax agency and the state’s health insurance exchange. The health exchange will then use tax data and other available records to determine if the individual is eligible for Medicaid, Children’s Health Insurance Program (CHIP), or premium tax credits (PTC) for private coverage via the exchange.

President of the Senate Mike Miller, Governor Larry Hogan, and Speaker of the House Adrienne Jones sign new bills into law at the State House in Annapolis. (Joshua McKerrow/Baltimore Sun)

“Making sure the sharing of data between systems is smooth is going to be critical to the program’s success,” says Dockray. “This is great data sharing—and we like data sharing—but agencies need to also be mindful of protecting privacy. One part of protecting privacy is how the data is handled in a technical way through the API, another aspect concerns a state agency’s business processes.” For example, the program intends to add a pause for those who check the box but then cannot be confirmed US citizens by the state’s health insurance exchange. The program will not continue in those cases until further consent is given. This thoughtful design ensures that if a person is concerned about “public charge” rules, they would have a chance to consider his or her choice before fully opting in.

It takes good user design up front and consistent re-evaluation once the program is implemented to ensure this program does what it’s meant to do—which is to inform more people about these types of medical coverage and connect them to the programs they may be eligible for. We know that other states, such as Louisiana, have considered using data-sharing between the tax and support program administrators for other purposes such as to restrict access. We applaud the state of Maryland for its initiative to connect more people to healthcare coverage and will be closely monitoring its success. For more resources on how to help initiatives like this succeed, read our reports about how states can create effective data-sharing agreements, and data-sharing strategies to improve transitions between Medicaid and exchange coverages.