Sharing Across the States: Using Tax Information to Enroll Kids in Health Coverage

By Ani Fete

April showers brings May flowers. Oh yes, and it’s also the dreaded tax season. Just like many Americans, I was up the night of April 16th scrambling to complete final paperwork to meet the tax filing deadline. You know the drill: we fill in pages upon pages of boxes and bubbles in order to find out whether we are getting a refund or writing a check. However, some states are using this information for an added purpose: to identify people who are likely eligible for enrollment in health coverage.

The State Health Access Data Assistance Center (SHADAC) recently released a spotlight report on Iowa’s four-year-old collaboration between the Iowa Department of Revenue (IDR) and the Iowa Department of Human Services (DHS) to indentify uninsured Iowa children who are likely eligible for hawk-i (CHIP in Iowa) or Medicaid. By adding two simple questions to state tax forms, Iowa can now target outreach efforts specifically to the households where uninsured, likely-eligible children live. Families that report that they have uninsured children and that have family incomes that meet the Medicaid and CHIP requirements are mailed information about the programs and an application.

Maryland and New Jersey have also used this approach to help identify and enroll uninsured children. These methods have not reached large numbers of children, in part because such a large portion of eligible children is already enrolled in these states, and in part because simply sending an application to a family is not always enough to get them to take the steps needed to complete the application and enroll. As we look to 2014, however, when millions of people will be newly eligible for coverage, tax-based outreach models could be an important and fruitful tool. Income eligibility will be based on modified adjusted gross income, which is derived from income reported when someone files taxes. Furthermore, a state could take steps to automate the eligibility process so that a person might be able to “opt in” to enrollment based on tax findings, or if they filed taxes electronically, they could automatically be taken to an online application for coverage if it appears they might be eligible. When it comes to innovative ways to do outreach and enrollment, states should only be limited by their own creativity.

For states interested in considering a similar model, the report also highlights key components and challenges of using income tax forms to identify and reach out to eligible populations. In Enroll America’s latest publication, An Enrollment Checklist for 2012, we encourage states to think about adopting enrollment policies that minimize documentation requirements and automate enrollment into coverage when possible. Using existing data, like information already collected on tax forms, to identify people who might be eligible for health coverage can improve enrollment rates while also effectively targeting scarce outreach dollars. 

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