This summer, Equifax’s CEO excitedly told investors about a “massive” new business chance: assisting states in enforcing the upcoming Medicaid work requirement. This policy change is set to leave millions of low-income individuals without health coverage.
For years, Equifax has been the go-to company for verifying American incomes—essential data for mortgage lenders and landlords alike. Now, thanks to a major domestic policy bill passed by congressional Republicans this summer, the company’s services are poised to become even more profitable.
Starting in 2027, states will be required to verify that millions of low-income adults are meeting specific criteria—such as working, volunteering, or attending classes for at least 80 hours monthly—before they can receive Medicaid or food assistance. These new work requirements and other benefit restrictions are projected to save the federal government nearly $400 billion by drastically cutting the number of eligible poor individuals.
For Equifax and a few other select businesses, this shift isn’t just a policy change; it’s a golden opportunity to significantly increase their wealth.
Equifax already holds a powerful position in supplying income data to states, a role some critics describe as a near-monopoly. Government officials, legal documents, and contracts reviewed indicate that the company has a history of sharply and frequently raising prices without corresponding improvements to its service.
Luke Farrell, a former official with the U.S. Digital Service under the Biden administration who supported state Medicaid programs, observed, “They own a product that has become a core piece of the safety net. I’ve never seen another vendor implement such dramatic price increases across public benefits.”
Leveraging exclusive contracts with payroll providers and other employers, Equifax has amassed an extensive database containing real-time information on 99 million workers and more than 750 million records. This allows state workers to quickly retrieve wages and work hours for an applicant by simply entering a Social Security number, with each data match costing up to $15, based on state records.
Currently, roughly half of all states utilize Equifax’s services, incurring annual costs often in the millions. For example, Michigan’s expenditure is projected to reach at least $12.8 million this year, while Virginia has committed to spending nearly $24 million under its contract.
States are now bracing for substantial increases in their payments, driven by both rising prices from Equifax and the new law’s mandate for more frequent income verification.
As negotiations commence, states appear to have very limited leverage.
According to North Carolina’s Medicaid director, Jay Ludlam, Equifax demanded a 24 percent price hike in 2022 as part of a new contract. The following year, prices soared again by 36 percent, nearly doubling the state’s total contract spending from $11.6 million in 2022 to $22.5 million this year.
Ludlam expressed his concern, stating, “The costs exploded really fast to us, and it seemed unwarranted. And we have very little leverage and recourse to back out.”
He anticipates that complying with the new work requirements will necessitate paying Equifax tens of millions of dollars more.
South Dakota’s expenditures for Equifax services surged by almost 400 percent, escalating from approximately $244,000 in 2022 to $1.2 million this year, as reported by state data. Tracy Mercer-O’Daniel, a spokeswoman for the South Dakota Department for Social Services, confirmed that the state is actively investigating “all possible technology solutions” to handle the increased income verification demands in 2027.
An interactive chart titled “Equifax’s Rising Prices” illustrates how the company has significantly increased its per-query rates with various state agencies over the last four years, as highlighted in the embedded data.
Joe Muchnick, an Equifax executive overseeing the Work Number database, explained that pricing varies by state due to differing technical requirements, with some agencies receiving discounts for larger contracts.
He noted that states could opt to review government records or collect pay stubs for income verification. However, many choose to contract with Equifax because of its ability to provide accurate information rapidly.
“We are a great partner to agencies and to applicants, because we are able to get them those benefits to the right person at the right time,” stated Mr. Muchnick.
Policy analysts warn that free public records, like state payroll databases, are often months out of date. This delay could render them insufficient for the new law’s mandate that Medicaid applicants verify their work status from the preceding month.
Equifax currently generates approximately $800 million annually from selling its Work Number service to government bodies, yet it projects this market could expand to $5 billion, especially with the new law. The Congressional Budget Office estimates that this legislation could result in nearly five million low-income individuals losing their health insurance.
States are hesitant to discontinue their reliance on Equifax due to its unparalleled service: automated, real-time access to employment data for roughly 40 percent of the nation’s workforce.
The company has informed investors that the only true alternative involves government employees manually reviewing pay stubs.
Mark Begor, Equifax’s CEO, conveyed optimism to investors shortly after the President signed the new law, stating, “We’re pretty bullish around government going forward.” During an October earnings call, he characterized the legal changes to Medicaid and food assistance as “a big positive” for Equifax.
[Image: Traders on the New York Stock Exchange floor with the Equifax logo visible on a screen.] From 2008 to 2018, the Federal Trade Commission had barred Equifax from acquiring competitors due to concerns about stifling competition. After this order lapsed in 2019, Equifax resumed its acquisition strategy.
The “Crown Jewel”
Founded in 1899 as a credit rating bureau, Equifax initially had employees visit businesses to assess customers’ creditworthiness. This intelligence was then compiled and sold as a “$25 Merchant’s Guide,” providing vital insights into reliable customers.
While credit ratings served as the foundation of Equifax’s business for a century, the company diversified into income verification in 2007 by acquiring TALX, the creator of the Work Number. At that point, Equifax’s employment records totaled 142 million.
Equifax expanded its data empire by compensating companies for exclusive access to employee data and by absorbing competitors. It also secured agreements with major payroll providers, gaining access to vast amounts of worker records. In 2024, a significant partnership was forged with Workday, a payroll provider serving over 10,000 companies.
The rapid expansion of the Work Number caught the eye of federal antitrust regulators. From 2008 to 2017, the Federal Trade Commission scrutinized Equifax’s acquisitions, fearing they were suppressing competition.
This growth proved highly beneficial for shareholders, with the Work Number now accounting for approximately a third of Equifax’s total revenue. Wall Street analysts consistently highlight it as a crucial asset.
An interactive flowchart titled “How Equifax Buys and Sells Worker Data” visually explains how major employers and payroll providers exclusively sell employee data to Equifax, which then resells this data to government agencies and private lenders.
Kelsey Zhu, a financial analyst at Autonomous Research, explicitly stated that “The Work Number is basically the No. 1 key growth driver for Equifax.”
Scott Wurtzel, another analyst, dubbed the Work Number Equifax’s “crown jewel.”
The Work Number is already a ubiquitous presence in mortgage lending, with industry analysts estimating that most transactions depend on Equifax’s data. (Last year, mortgage lenders launched a class-action lawsuit, alleging that the company’s tight control over employer data has resulted in monopolistic pricing for essential loan services. Equifax’s attempt to dismiss the case was recently denied by a judge.)
However, with a slowdown in home sales and a surge in public benefit enrollments, an increasing portion of the Work Number’s revenue now originates from government clients.
During investor calls, Equifax executives have consistently highlighted their unchallenged market position, claiming no other company can truly compete.
CEO Mr. Begor remarked last spring, “We don’t feel an impact, from the one or two participants that have much smaller businesses.”
Conversely, Mr. Muchnick, the Equifax executive in charge of the Work Number, asserted to The Times, “We operate in a highly competitive space.”
From $10 Per Query to $45: Price Hikes
[Image: A storefront advertising an insurance agency, with a prominent “Obamacare” sign.] In 2023, the Centers for Medicare and Medicaid Services (CMS) inked a $1.2 billion multiyear agreement with Equifax to verify incomes for Medicaid recipients and those on Obamacare health plans. This marked Equifax’s largest contract to date.
The St. Louis Housing Authority had been using Equifax’s Work Number since 2019 to confirm that applicants for public housing met the income eligibility criteria.
Court records reveal that in March 2022, Equifax informed the agency of a “pricing adjustment,” which would raise fees from approximately $10 to $37 per verification. A subsequent notice in March 2023 further escalated the price to nearly $46.
In 2024, the public housing agency initiated a lawsuit against Equifax, alleging that the price increases exceeded their negotiated terms. Equifax countered by referencing a contract clause granting it the “categorical right” to alter prices with a mere 30 days’ notice.
A district court ruled in favor of Equifax in September. The St. Louis Housing Authority has since appealed this decision and ceased using the Work Number service.
The St. Louis agency’s ordeal exemplifies a pattern of steep and frequent price adjustments that both state and federal officials report experiencing with Equifax.
In 2024, the Kansas Department for Children and Families signed a contract featuring a price that will double over four years, reaching $19.39 per verification by 2028. Similarly, the Colorado Department of Human Services has seen its price surge to $15 this year, up from approximately $5.50 in 2016.
An interactive chart titled “Equifax’s Prices Quickly Tripled in Colorado” visually represents how the cost per data match from Equifax has dramatically increased for the Colorado Department of Human Services.
Even the federal government has found itself struggling to keep up with Equifax’s escalating fees.
In 2023, the Centers for Medicare and Medicaid Services (CMS) entered into a colossal $1.2 billion multiyear agreement with Equifax to verify the incomes of individuals enrolled in Medicaid and health plans offered through the Obamacare insurance marketplaces.
This contract effectively doubles the government’s query price from roughly $5 in the early 2020s to an estimated $10 by 2028, according to a Medicaid officials’ presentation. States unexpectedly utilized the service far more frequently than CMS had projected.
Farrell, the former U.S. Digital Service official, noted that the situation escalated into a “budget crisis,” making it operationally impossible for CMS to cover the full expenses.
Consequently, this year, the federal government mandated that states cover a quarter of the total cost.
The financial implications were staggering. South Dakota faced an additional $470,000 in fees, on top of the $776,000 it already paid Equifax for income verification in child support and food assistance. California, facing an estimated $9 million cost, ultimately ceased using the service.
Emergence of New Competition
[Image: Dr. Mehmet Oz speaking from a lectern with the presidential seal.] Dr. Mehmet Oz serves as the principal federal Medicaid official.
As these new policies come into play, Equifax has deployed its sales team across state capitals, actively working to renew existing contracts and forge new partnerships.
At a recent conference for state Medicaid officials in Milwaukee, Equifax representatives prominently showcased their brand, distributing baseball caps, pens, and screen cleaners from their booth in the main hall.
However, a new dynamic was present: competition. Several startups, each vying to disrupt Equifax’s stronghold, also manned booths, hoping to seize a significant business opportunity created by the new Republican legislation, just like Equifax.
Adam Roseman, CEO of the income verification startup SteadyIQ, declared, “It’s enormous for us.”
Due to Equifax’s exclusive agreements with payroll providers, rival companies are unable to obtain income information through the same channels.
In response, startups have sought to bypass Equifax’s data control by developing secure platforms that enable individuals to directly share their digital employment or banking details with state authorities.
SteadyIQ is currently piloting its system in Missouri. The company’s executives contend that their product will provide states with more comprehensive income data, particularly for gig economy workers whose earnings might be missed by conventional payroll systems. However, this innovative approach requires applicants to manage multiple system logins and be comfortable sharing their personal financial data.
The Trump administration has also entered the fray, developing its own tool, similar to those of the startups, to facilitate Medicaid applicants’ direct sharing of payroll information.
This initiative was originally launched by the Biden administration last year, motivated in part by frustration over Equifax’s market dominance, according to four involved officials. Nevertheless, many software engineers working on the tool departed government service this year, a consequence of the Trump administration’s federal workforce reductions.
The government successfully piloted the program in Louisiana and Arizona. Dr. Mehmet Oz, the lead Medicaid official, reported promising results from these experiments but acknowledged that further development is needed before a nationwide launch.
He also indicated that Medicaid is actively seeking more favorable agreements with vendors involved in implementing the work requirements, though he refrained from naming Equifax directly.
“We will negotiate the prices,” he asserted, adding that he would advise states: “We do not want you to get taken advantage of.”
David McCabe contributed reporting.