HIPAA

Health Insurance Portability and Accountability Act (HIPAA)

Health Insurance Portability and Accountability Act (HIPAA)

On August 21, 1996, President Bill Clinton signed a bipartisan overhaul of health insurance into law. But the Health Insurance Portability and Accountability Act (HIPAA), also known as Kassebaum-Kennedy, for its two principal Senate sponsors, Nancy Landon Kassebaum, R-Kan., and Edward M. Kennedy, D-Mass., was hardly the sweeping overhaul Clinton had in mind when he took office. Although HIPAA (PL 104-191) did represent the most comprehensive federal regulation of private health insurance ever enacted, it addressed only a small portion of the population: those already insured who wished to move from one group plan to another or who wanted to move from a group to an individual plan. And although the measure sought to improve the availability of insurance, it did nothing to make it more affordable—an omission that would come back to haunt the measure only two years later, when analysts reported that insurers were avoiding some of the law's requirements by charging premiums up to six times higher for persons eligible because of HIPAA than they charged other customers. (Boyle, 2003)

At the insistence of Republicans in the U.S. House of Representatives and the Senate, who wanted to put their own stamp on the health issue, the measure also went well beyond its original modest intentions. In addition to provisions seeking to reduce the ability of insurers to exclude individuals from coverage because of preexisting condition, the final measure included a major antifraud effort and a four-year experiment with the medical savings account (MSA), a tax-preferred account combined with a high-deductible catastrophic illness insurance policy that gave individuals much more responsibility for their personal health care spending. It also included several other health-related tax provisions, such as an increase in the percentage of premiums that the self-employed could deduct from their income taxes and new tax deductions for long-term care services and long-term care insurance premiums. The law has probably become best known for its requirement for rules to protect the confidentiality of medical information. (Wu, 2007)

Specifically, HIPAA sought to develop the portability of advantages by making it easier for workers to move from job to job without danger of being locked out of insurance or having to await treatment of pre-existing health difficulties. The HIPAA bill did not permit workers to take their specific health plans with them when they changed jobs (what many people mistakenly ...