What is HIPAA?
Explaining the Health Insurance Portability and Accountability Act
The Health Insurance Portability and Accountability Act is a complicated name for two simple concepts: health insurance that can be transferred from one facility to another and assurance that information in health records remains private.
The Portability Part of HIPAA
Portability refers to the client having health insurance (group healthcare plan) that is portable i.e. the patient who is receiving healthcare insurance from his/her employer keeps his/her coverage even if he/she changes jobs. Without portability, the client with pre-existing conditions is “locked” into his/her company’s health insurance to pay for medical care.
Using diabetes as an example, if an individual is diagnosed with diabetes while employed by a company, the individual’s “current group health plan might pay for insulin and visits to the doctor. (But) before HIPAA was enacted, if you (the employee) switched to a new group health plan, your diabetes would be a pre-existing condition and it would not be covered under the new group health plan” (Charlotte-Mecklenburg School).
An employee with a medical condition or ailment risked going into unmanageable debt if he/she moved or got a new job because he/she might have to pay thousands of dollars for medical treatment that had once been covered by his/her health insurance. Because the company insurance plan paid for these individual’s medical care, they were “locked into” their jobs.
What is a Pre-existing Condition?
According to the website for Charlotte-Mecklenburg School (CMS), “A pre-existing condition is generally considered a physical or mental condition for which medical advice, diagnosis, care, or treatment was recommended or received before you enrolled in a health insurance plan…it can also be considered a problem that you were aware of but never sought treatment for.”
In addition, according to a spokesperson for the Arizona Department of Insurance “under some definitions…a medical problem can be considered pre-existing even if you did not know you had the problem before you bought your health plan” (CMS). Portability refers to insurance coverage for pre-existing conditions being transferrable or portable; if one changes healthcare plans, he/she maintains coverage. Pre-existing conditions are not excluded from coverage.
HIPAA and Limitations
The Health Insurance Portability and Accountability Act was enacted in 1996 to make insurance “portable,” but the Accountability Act has some limitations and is not a fool-proof guarantee that benefits and coverage from one healthcare plan will be carried over to another healthcare plan.
Individuals who are considering a new healthcare plan need to consider the following limitations of HIPAA:
- “Just because HIPAA grants you insurance ‘portability’ does not mean that you will have the same benefits, premiums, co-payments, or deductibles when you move from one health plan to another” (CMS).
- Although HIPAA “limits exclusions for pre-existing conditions,” HIPAA doesn’t eliminate all exclusions for pre-existing conditions (CMS).
- The insured has to have maintained a “Creditable” health insurance plan for a year -without any lapses greater than 63 days - for his or her insurance coverage to be immediately transferred to the new healthcare plan without a “pre-existing condition exclusion.”
- According to the Charlotte-Mecklenburg Health and Wellness website, a waiting period of one to three months is commonly required before an individual who switches jobs is eligible to join a new group healthcare plan (although the waiting period is not considered a lapse in coverage).
- Portability of insurance may not apply if the individual switches from a group healthcare plan to an individual plan.
Determine with certainty which conditions will be covered before changing insurance plans. Review healthcare plans carefully before committing, and ensure continuity of care by preventing lapses in coverage greater than 63 days.
Despite HIPAA, many individuals are still locked into their jobs to receive health benefits. According to Liz Wolgemuth, journalist of U.S. News World Weekly, some workers are reluctant "...to leave employers to whom they are 'job-locked,' or committed to solely for health benefits--a situation more common to older workers and those with pre-existing conditions" (2009). At present, various healthcare reforms are being considered to address the problem.
HIPAA and Privacy
The Health Insurance Portability and Accountability Act or HIPAA has another important function besides portability of insurance; it guarantees that information about patients remains confidential and private. Portability of insurance requires transfer of patient information between agencies, and computerizing records expedites this process; however, computerized or electronic patient records also makes for a vulnerable record-keeping system.
The Health Insurance Portability and Accountability Act in addition to addressing portability of insurance, addresses the importance of recognizing vulnerabilities in the record-keeping system and maintaining patient privacy. The article “Maintaining Privacy of Patient Healthcare Records” addresses the second aspect of HIPAA, privacy and confidentiality of medical records, in more detail.
References
Factsheet. (2004). The health insurance portability and accountability act. United States Department of Labor.
HIPAA law explained. (n.d.). Charlotte-Mecklenburg School. CMS.
Wolgemuth, L. (2009). How healthcare reform could get you hired. U.S. News World Weekly. Oct. 5 Issue.
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