The Major Databases that Obamacare Exchanges Will Have Access To

When shoppers apply for health insurance through the forthcoming state-based Obamacare exchanges, the online system will verify each applicant's information by pulling in data from more than half a dozen federal agencies ranging from the IRS to the Peace Corps. It will know who you are, how much money you make, and whether or not you're in the United States legally, CNN writes.

Stephen T. Parente, finance professor at the University of Minnesota, and Paul Howard, is director of the Manhattan Institute's Center for Medical Progress, write:

By mid-December, the federal government is planning to quietly enact what could be the largest consolidation of personal data in the history of the republic. If you think identity theft is a problem now, wait until Uncle Sam serves up critical information on 300 million American citizens on a platter.

Hyperbole? Unlikely. Here's why: As the Patient Protection and Affordable Care Act lurches toward full implementation on Jan. 1, 2014, only a handful of states (California, Massachusetts, Maryland, Oregon and Washington) are likely to be truly ready to operate state exchanges by next October. These exchanges are supposed to be the primary mechanism for giving federal subsidies to uninsured, low-income Americans. Without state exchanges, ObamaCare runs into trouble.

ObamaCare's fail-safe mechanism is the creation of a federal exchange the administration has quietly put in motion. If the plan were simply a Travelocity-style portal for choosing different insurance products across state lines, we would support it. In fact, the federal government already has similar exchanges for Medicare Advantage plans and Part D prescription drug plans.

ObamaCare's federal exchange, however, will be very different from these earlier efforts or emerging private exchanges such as eHealthInsurance.com. In order to determine eligibilty for health insurance subsidies, the new exchange has to bring together information about you and your family from the Treasury Department and IRS, the Department of Homeland Security, the Department of Justice, as well as your Social Security number — all coordinated by the Department of Health and Human Services.

In response to a query from CNNMoney, HHS provided a list of the federal data sources its hub will be gathering, and from where:

• Internal Revenue Service: adjusted gross income, family size, filing status (married or single), calculation of any tax credits the applicant is eligible for to subsidize their health insurance premiums
• Social Security Administration: Social Security number validation, Social Security benefit payments, incarceration status
• Department of Homeland Security: verification of immigration status
• Department of Defense, Department of Veterans Affairs, Office of Personnel Management and Peace Corps: checks to see if the applicant is enrolled in health care programs run by these departments