Learning in Real Time on Electronic Income Verification

Electronic income verification is the cornerstone of enrolling millions of people in coverage under the Affordable Care Act. But if you think this topic sounds dry you haven’t been paying attention. In January, through the Robert Wood Johnson Foundation-sponsored State Health Reform Assistance Network, NASHP hosted a meeting of 10 states and three federal agencies to discuss this topic. The meeting found Alabama officials Cathy Caldwell and Gretel Felton demonstrating the trust states put in both data and Medicaid and CHIP recipients with a “trust fall.”
Meeting participants got into the weeds about what electronic data sources they currently use to verify income, which sources they would like to use, and which sources they wish they understood better. Among these are public sources such as quarterly wage and unemployment insurance data (often collected by state departments of labor), as well as private sources such as TALX/Work Number (two separate products offered by the same company). Although all provide benefits and pose challenges in the current eligibility environment, the common question for meeting participants was how useful these sources will be in 2014 when determinations will have to be made in real time.
Despite these unknowns, states must press ahead in their data verification planning efforts. If your state is struggling with data verification, too, check out a recent report, written for New York by Manatt Health Solutions, that evaluates sources of income data and reviews income-data verification systems in three states. The report is filled with useful information about how to evaluate data sources and ways to adapt them for future health reform needs. It even includes a handy evaluation outline, which lists and describes the criteria Manatt used in its analysis.
At the meeting, three states also discussed their specific experiences using data sources:

• New York uses several data sources, including TALX/Work Number, quarterly wage reporting, and new-hire data for income verification and Social Security Administration (SSA) data for citizenship verification. The state noted limitations with each, such as the expense and limited reach of TALX/Work Number and the reporting delay in quarterly wage data. One potential solution the state discussed was to couple the use of quarterly wage data with a post-eligibility review as a more comprehensive process than using the TALX/Work Number alone. However, this would require the state to determine its risk comfort level.

• Oregon presented an analysis of a survey of 1,200 applications, which compared applicant-provided information to online-database information. The state found that earned income information was available online, but out of date, 61 percent of the time. Income could be found online 40 percent of the time when the applicant declared none, but that online information was also sometimes out of date. For more results of the study, check out Steve Novick’s presentation here.

• Alabama considers earned wages, not unearned income, to be the biggest area of need for electronic data. In the past the state piloted TALX and currently uses the Work Number directly for cases that are not in SNAP or TANF. Alabama uses the Work Number indirectly through the Express Lane Eligibility (ELE) process. ELE allows workers to use an eligibility decision for SNAP and TANF to approve applicants for Medicaid without collecting or verifying income information from the applicant. Alabama Medicaid is comfortable with ELE determinations because the SNAP/TANF agency uses the Work Number to verify income. Like New York and Oregon, Alabama has found quarterly wage data isn’t always useful, particularly for those who change jobs frequently.

Questions About the Federal Data Hub
How the federal data hub will fit into this picture remains the biggest unknown for states. Questions remain about what data will be available and for what populations. There are also questions about how the federal data hub will work in practice and about its utility for states in making current income determinations, since we understand the hub will not store data. Instead, we understand that by inputting Social Security numbers, information on dependents and head of household will be available. This information may help with reconciling Medicaid and IRS household compositions. States eagerly await more information and also understand that CCIIO is looking for states to work with them on piloting use of the federal data hub.
Interested in discussing or learning more about eligibility and data verification issues? Join theconversation on State Refor(u)m or ask a question of your fellow states. We want to know what your state is thinking on these issues!