As IRS Implements Obamacare, Privacy Concerns Rise

Published September 27, 2013

The Internal Revenue Service has been under fire for overstepping its authority and unfairly targeting conservative groups for greater scrutiny when they sought tax-exempt status. Given that the agency is tasked with the job of enforcing President Obama’s health care law, congressional Republicans are now worried the IRS’s expanded power could lead to further abuses and violations of privacy.

The IRS will play a key role in implementing ObamaCare. The agency will enforce the law’s requirement that most individuals have health insurance or pay a fine and will help determine whether they are eligible for a tax credit to cover the costs of their premiums. The U.S. Department of Health and Human Services insists strict privacy controls will safeguard personal information and the IRS will not be able to access medical records.

Jonathan Ingram, a health care policy analyst with the Illinois Policy Institute, says there are always going to be privacy concerns when that much information is given to one agency. Given the complexity of Obama’s law is, and that it will be enforced by a federal taxing agency, the United States may be unique among the nations of the world in the way it provides health care for its citizens, Ingram says.

“In the EU and Canada, the government health care plans and taxing agency are separate departments—they operate a lot like Medicare. In the United States, however, the government will be sending payments to private insurance companies, hospitals, and doctors; we’ll be spending trillions of dollars. HHS and the IRS will no doubt have to work closely together, and the chance for abuse will no doubt rise,” said Ingram.

Major Expansion of Power

According to Devon Herrick, a health economist and senior fellow at the National Center for Policy Analysis (NCPA), the genie is already out of the bottle, regardless of whether the IRS can view your medical records.

“The IRS already has access to all of our financial information, from our wages, to our bank accounts, to the amount of money received greater than $600 from every company that pays us. I don’t know why the IRS would need my medical records, but neither do I see how viewing my medical records could be any worse than viewing how much money I have,” said Herrick.

“When it was revealed that the Affordable Care Act contained financial penalties for failing to have health coverage, many people believed the IRS wouldn’t vigorously enforce the law because it was far afield from the IRS’ mission,” Herrick said. “That all changed when Justice Roberts used the argument that the penalty was really a tax. What people failed to appreciate is that bureaucracies are built by expansions of their turf.”

Inevitable Loss of Privacy

Dr. Roger Stark, a health care policy analyst at Washington Policy Center and a retired physician, says with the government playing a much bigger role in our health care system, a loss of privacy is inevitable.

“This is a unique problem. Somewhere there is going to be a central computer asking, What is your income, health history, are you a criminal or an illegal alien, and track your health policy so that all this data is available on a database and can be accessed immediately,” said Stark.

Seton Motley, president of free market public policy organization Less Government, says potential abuse from the IRS is no longer just a conspiracy theory but fact.

“The government takes all this data, but what’s to stop them from using this against people or groups to harm them? For example, during the auto [industry] bailout, the Obama administration used campaign finance data to close auto dealerships, not because they were not selling enough cars but because the owners had made political donations to the opposition. Now they have given the enforcement of ObamaCare to the most pernicious agency in the entire government. This is no longer an ideological argument; this is what big government looks like,” said Motley.

“Government does not exist in a vacuum. It is like a living organism that seeks to not only preserve itself, but to expand, no matter which party is in power,” said Motley.