Maryland legislators OK plan to use tax returns to help residents with insurance enrollment

Maryland on a map
A Maryland bill that would allow residents to apply for healthcare via tax returns passed the House and Senate. (Getty/gemenacom)

A bill that would allow Maryland residents to begin the enrollment process for health coverage on their tax returns was passed in the state Senate on Thursday, 46 to 0.

Set to take effect June 1, Maryland would be the first state to use the tax system to identify those in need of healthcare coverage. The bill awaits Gov. Larry Hogan's signature, and if he OKs the plan enrollment will be available on 2019 tax returns next spring. 

“It would get tens of thousands of citizens access to Medicaid or private plans,” Vincent DeMarco, president of the Maryland Citizens Health Initiative, an advocacy group that pushed for the plan, told FierceHealthcare. “Maryland is leading the nation with an idea that has not been tried anywhere else.”

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Last week the House overwhelmingly approved the bill as well, 200 votes to 9. 

Under what is being called the Maryland Easy Enrollment Health Program (MEEHP), an uninsured Maryland resident would be able to start the enrollment process by simply checking a box on his or her state income tax return. In addition, this platform will allow the state’s healthcare exchange to determine if that person is eligible for free or low-cost health insurance.

Those who qualify for Medicaid will automatically be enrolled. 

RELATED: CMS gives OK to Maryland Medicaid waiver

According to a fact sheet about the program, seven out of 10 people who are uninsured and qualify for help file Maryland income tax returns. MCHI expects the program to identify 50,000 people eligible for Medicaid and an additional 70,000 Marylanders could buy insurance at little or no cost through the help of subsidies. 

DeMarco says there will be an advisory group to oversee the work and make sure it is implemented correctly. 

“We want this to serve as a model for the rest of the country,” he said. 

The program isn't Maryland's first progressive, bipartisan step to innovate healthcare. Last year the state passed a reinsurance bill, for example, which helped to stabilize the insurance market and cut premiums by 30%. But haven't other states launched efforts to connect tax filings and insurance enrollment?

Stan Dorn, director of the National Center for Coverage Innovation (NCCI) and senior fellow at Families USA, told FierceHealthcare that one reason is the complexities of both the tax and the health coverage arenas. Former President Bill Clinton outlined several concerns that could hold back such a program, Dorn said.

“He identified three factors: The new idea might hurt an existing interest group by taking away money or power (which is not the case here); some people just resist new ideas and many new ideas have lots of moving parts, which leads some people to shy away,” Dorn said.

RELATED: New legislators and governors may expand reinsurance programs

And Dorn notes that policy is never easy to implement, and he knows quite well how complex this particular issue can be—he’s been working on the intersection of tax filing and healthcare enrollment for a decade, first at the Urban Institute’s Health Policy Center and now at Families USA.

“Challenges always emerge when multiple state agencies have to cooperate. IT connections between different systems, public and private (think about TurboTax, for example), also introduce complexities. None of these challenges are insuperable. I’m confident that all of them can be overcome, but it will take a lot of work,” Dorn said. “Maryland is well-positioned for success. The key state agencies want to implement this policy well and have a cooperative history. Relevant state officials have solid IT expertise, particularly on the exchange side.”

DeMarco notes that the policy will not only help the underserved, it will keep everyone’s premiums lower.

“It’s a win-win to make Maryland healthier,” he added.  

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