IRS Could Potentially Urge People to Sign Up for Medicaid

By using data from the federal earned income tax credit, the IRS could sign up low-income persons for Medicaid.

A recent study finds that the Internal Revenue Service (IRS) could help find uninsured people eligible for Medicaid.

Approximately one-third of people without health insurance received a federal earned income tax credit (EITC). The IRS, however, does not tell these people that they would likely qualify for Medicaid or subsidies to buy insurance in exchanges.

According to a study conducted by the Urban Institute, 4.1 million uninsured people are eligible for Medicaid and 1.1 million are eligible for subsidies on policies purchased in health exchanges.

Some states, such as New Jersey and Maryland, check state income tax filings to find uninsured people who are most likely eligible for Medicaid. Other states, such as Louisiana and West Virginia, have sent letters to uninsured people receiving food stamps to advise them to sign up for Medicaid.

The federal government could do more to find uninsured people by notifying those receiving the EITC. The Treasury could provide an easy way for people to request information and assistance, but the IRS does neither, according to the study.

The IRS website directs people to www.healthcare.gov to obtain their information and also tells tax preparers to advise people about their insurance options, however, the researchers wrote that many people who receive the EITC do not use tax preparers.

Researchers believe that IRS data would greatly help to identify people eligible for assistance, since all tax filers have to report their insurance status.

People who are interested should be invited to request a health law navigator to contact them and discuss their option, since a letter may not be enough to get them to sign up.

“This is not an easy problem to solve, but identifying ways to reach out to uninsured EITC families is something we should be talking to the IRS about,” concluded study co-author Linda Blumberg, PhD.