Fear not, the IRS won’t be collecting your medical records

Led by Rep. Michele Bachmann (R-Minn.), a number of House Republicans asserted this week that the newly scandalized Internal Revenue Service, in its role as Obamacare enforcer, would collect sensitive personal medical records. That was one of the latest reasons cited for repealing the 2010 law, formally known as the Patient Protection and Affordable Care Act.

Where they came up with this specious idea is a bit of a mystery, because you won’t find any support for it in the law itself or the IRS regulations implementing it. Let’s just say it emerged from the same place as Sarah Palin’s death panels.

The Affordable Care Act does call on the IRS to do many things in support of its insurance reforms, such as determining whether someone is eligible for insurance subsidies and determining whether employers face penalties for failing to offer a minimum level of coverage to their full-time workers. In none of these instances, however, would the agency need to obtain medical records.

That’s true, too, for the role the IRS will play in enforcing the requirement that virtually all adult Americans obtain health insurance. Scofflaws will have to pay extra on their annual tax returns. Once fully implemented in 2016, the penalty will amount to about $58 or 0.2% of taxable income per month without coverage, whichever is greater.

The IRS plans to collect only a few new pieces of personal information about taxpayers, however: the name of their insurer, the duration of their coverage and, if the policy was provided through their workplace, the amount they paid for it. That information will be submitted annually to the IRS by insurers and employers, similar to the way payments to contractors and investors are reported.

Prior to the Affordable Care Act, this sort of information about health insurance might conceivably have revealed something about taxpayers that they’d rather have kept to themselves. Unusually high premiums would have been a sign that the taxpayer had a chronic illness or preexisting condition. But starting in 2014, insurers can no longer set premiums based on a person’s health. The only reason a taxpayer might not want the IRS to see these reports from insurers and employers is because of the penalties that could ensue for noncompliance.

It’s worth noting that the IRS doesn’t collect personal medical records today even from those who claim tax deductions for large medical expenses. The agency’s Publication 502 advises taxpayers to save invoices showing what care they received in association with the expenses they’re claiming, but it also explicitly instructs, “Do not send these records with your return.” The only time the IRS would examine them is when it is auditing a taxpayer, and even then it would look only at the records linked to the deducted expenses, not the taxpayer’s entire medical history.

In fact, federal law bars the IRS from routinely hoovering up medical records. Under the Health Insurance Portability and Accountability Act of 1996, such records could be obtained only with a court order or through some other legal process, said Linda Ackerman, a privacy law expert in San Francisco.

The IRS has never been a beloved institution -- a Google search for “IRS” and “jack-booted thugs” yields more than half a million results -- and the tempest it kicked off with its handling of 501(c)(4) applications has made it yet more suspect. But Obamacare doesn’t entrust any personally sensitive information to the agency that it doesn’t already collect.

Prodigiously long and complex laws invite opponents to demonize them by fudging the details, and that’s certainly been true for the Affordable Care Act. Perhaps at some point we’ll stop having hyperbolized debates and futile votes to repeal the law (which the House just did for the 37th time), accept the need for a comprehensive approach to healthcare reform, and start working on the measure’s shortcomings. Or maybe opponents will just keep inventing straw men to battle.

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