When Equifax’s CEO spoke to investors this summer, he described a “just massive” new business opportunity: helping states enforce the Medicaid work requirement that is expected to leave millions of poor people without health insurance.

Equifax has, for years, dominated the business of verifying Americans’ incomes, a crucial piece of data for banks writing mortgages or landlords renting apartments. The giant domestic policy bill that congressional Republicans passed this summer is about to make the company’s services even more lucrative.

Beginning in 2027, states must verify that tens of millions of low-income adults work, volunteer or take classes at least 80 hours a month before giving them Medicaid or food assistance. The work requirements and other new restrictions on public benefits are designed to save the federal government nearly $400 billion by significantly reducing the number of poor people eligible for the programs.

For Equifax and a handful of businesses, the change also represents the chance to become a lot richer.

Equifax has a robust business providing income data to states, which some critics say borders on a monopoly. The company has made a practice of steeply and frequently increasing prices without improving its product, according to interviews with government officials, legal records and contracts reviewed by The New York Times.

“They own a product that has become a core piece of the safety net,” said Luke Farrell, who worked in the U.S. Digital Service, a federal agency, during the Biden administration supporting state Medicaid programs. “I’ve never seen another vendor do such price hikes across public benefits.”

Through exclusive contracts with payroll contractors and other employers, Equifax has built a vast database with current information on 99 million workers and more than 750 million records. To check an applicant, a state worker can enter a Social Security number and almost instantly pull up wages and work hours — at prices that run as high as $15 for each data match, according to state records.

About half the states use Equifax, often paying millions of dollars each year. In Michigan, the bill will be at least $12.8 million this year. Virginia has a contract to spend nearly $24 million.

Now states are bracing for big increases in their payments both through price increases and because the new law will require them to check people’s incomes much more often.

As they begin negotiations, experience suggests they have little bargaining power.

In 2022, Equifax demanded a 24% price increase as part of a new contract with North Carolina’s Medicaid program, according to Jay Ludlam, the state’s Medicaid director. Last year, the company raised its prices again, this time by 36%. The state’s total spending on the contract nearly doubled — from $11.6 million in 2022 to $22.5 million this year, according to state officials.

“The costs exploded really fast to us, and it seemed unwarranted,” Ludlam said. “And we have very little leverage and recourse to back out.”

He expects needing to pay Equifax tens of millions of dollars more to comply with the work requirements.

South Dakota’s costs for Equifax rose nearly 400%, from about $244,000 in 2022 to $1.2 million this year, according to data the state provided to the Times. The state is now exploring “all possible technology solutions” for the extra income checks they will need to do in 2027, said Tracy Mercer-O’Daniel, a spokesperson for the South Dakota Department of Social Services.

Joe Muchnick, an Equifax executive who oversees the database, known as the Work Number, said prices vary between states because agencies have different technical requirements. Some receive discounts for signing larger contracts.

He said states could always review government records themselves or collect pay stubs to verify incomes. Even so, he said, many sign contracts with Equifax because it can deliver accurate information quickly.

“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,” Muchnick said.

Policy analysts say the free public records, such as state payroll databases, often lag by months. They may be too outdated to satisfy the new law’s requirements that Medicaid enrollees prove they worked the month before they apply.

Equifax currently earns about $800 million per year selling the Work Number to government agencies but estimates that the market is as large as $5 billion and growing even larger with the new law. The Congressional Budget Office has estimated the law could cause nearly 5 million low-income people to become uninsured.

“We’re pretty bullish around government going forward,” Equifax CEO Mark Begor told investors 2 1/2 weeks after President Donald Trump signed the law. In an October earnings call, he described the law’s changes to Medicaid and food assistance as “a big positive” for the company.

‘The Crown Jewel’

Equifax was founded in 1899 as a credit rating bureau. Employees went business to business asking how likely each customer was to pay back store credit. It sold that information as a $25 Merchant’s Guide, giving valuable information about who to trust with store tabs.

For a century, credit ratings were the bedrock of Equifax’s business. It branched out into income verification in 2007, when it acquired a company called TALX, which had created the Work Number. At the time, Equifax had 142 million employment records.

It expanded by paying companies to exclusively share employees’ data, and by acquiring competitors. The company has also signed deals with large payroll providers that hand over troves of worker records. In 2024, Equifax announced a partnership with Workday, a payroll provider that serves more than 10,000 companies.

The Work Number’s quick growth has drawn attention from federal antitrust regulators. From 2008-17, the Federal Trade Commission monitored the company’s acquisitions out of concerns it had stifled competition.

For shareholders, the growth paid off. The Work Number is now responsible for about one-third of the company’s revenueFinancial analyst, Scott Wurtzel, described the Work Number as Equifax’s “crown jewel.”

The Work Number has become ubiquitous in mortgage lending, where industry analysts estimate most transactions rely on Equifax’s data. But as the pace of home sales has slowed and enrollment in public benefits has surged, a growing share of the Work Number’s business is coming from government payers.

From $10 per ping to $45

Since 2019, the St. Louis Housing Authority had used Equifax’s Work Number to verify that people seeking public housing had incomes low enough to qualify.

According to court records, in March 2022, it received a notice from Equifax of a “pricing adjustment” that would increase fees from about $10 per verification to $37. Another notice followed in March 2023, raising the price to nearly $46.

In 2024, the public housing agency sued Equifax over the price increases because they went beyond the negotiated amounts. Equifax, in its response, cited a clause in their contract that gave the company “the categorical right” to change prices with 30 days’ notice.

A district court sided with Equifax in September. The St. Louis Housing Authority has appealed the ruling and has stopped using the Work Number.

The Colorado Department of Human Services’ price has increased to $15 this year from about $5.50 in 2016.

Even the federal government has struggled to pay Equifax’s rising fees.

In 2023, the Centers for Medicare and Medicaid Services signed a $1.2 billion multiyear deal to have Equifax verify the incomes of people enrolled in Medicaid and health plans through Obamacare insurance markets.

The contract doubles the government’s query price, from about $5 in the early 2020s to about $10 in 2028, according to a presentation by Medicaid officials. States began using the contract far more than CMS had expected.

“It became a budget crisis, where CMS operationally could not continue to cover the full costs,” said Farrell, the former U.S. Digital Service official.

This year, the federal government began requiring states to pay one-quarter of the bill.

California estimated it would cost $9 million, and stopped using the service.

New competition

As the new policies take effect, Equifax has fanned its sales force out across state capitals to renew existing contracts and create new ones.

At a conference for state Medicaid officials in Milwaukee, Equifax sales representatives handed out branded baseball caps, pens and screen cleaners from its vendor booth at the center of a huge hall.

But there was also a new element: competition. Multiple startups aiming to challenge Equifax’s dominance also hosted booths. They, like Equifax, are hoping for a major business opportunity under the new Republican law.

“It’s enormous for us,” said Adam Roseman, CEO of SteadyIQ, an income verification startup.

Because Equifax maintains exclusive contracts with payroll providers, competitors cannot acquire income information that way.

Instead, startups have tried to work around Equifax’s grip on payroll data by establishing a secure way for people to share their digital employment or banking information with states directly.