Health Insurance Data Privacy in the Federal Data Services Hub

The federal Data Services Hub is the essential software component of, the health insurance portal for Obamacare, without which advance premium tax credits, cost-sharing reductions, and direct payments to insurers would not be possible. To the credit of The Centers for Medicare and Medicaid Services (CMS), the marketplace, which was built by 55 contractors and now serviced by dozens more, is, “one of the most complex pieces of software ever created for the federal government. It communicates in real time with at least 112 different computer systems across the country.”

In simplest terms, the federal Data Services Hub is a “routing tool that helps Marketplaces provide accurate and timely eligibility determinations. The Data Services Hub will verify data against information contained in already existing, secure and trusted Federal and state databases.” Because the Data Services Hub provides a single connection to federal, state, and private data sources in order to verify applicant information for income, citizenship, immigration status, and employer coverage, the Data Services Hub will necessarily be handling a large volume of very sensitive personal information. In the opinion of CMS, “the Hub and its associated systems have been built with state-of-the art business processes based on federal and industry standards.”

By rough estimate, CMS is spending approximately $500 million dollars over eight years to create and manage the federal Data Services Hub technology product. For the necessary cloud computing power to host the federal Data Services Hub data, CMS paid $55.4 million to Terremark Federal Group, a wholly-owned subsidiary of Verizon Communications Inc. (VZ). CMS has also contracted with the credit reporting bureau Equifax, Inc. to obtain personal information about applicant’s income and employer-sponsored health insurance coverage. Specifically, Equifax Workforce Solutions, a wholly owned subsidiary of the credit bureau Equifax, Inc., has a 5 year, $329.4 million contract to provide, “information [about individual health insurance applicants] that is more current than what is available on federal income tax returns.” Furthermore, contract documents show that Equifax must provide income information “in real time,” usually within a second of receiving a query from the federal government. (more…)

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