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What is the Health Insurance Portability & Accountability Act (HIPAA)?

When people ask what is HIPAA, they are asking what is the Health Insurance Portability and Accountability Act.   The HIPAA Act was established in 1991, and made into law in 1996 to protect employees and patients in regards to health care. 

Learning the details of what the HIPAA Act is, is not an easy task, but there are certain main points you should understand. It provides that as long as there is not a 63 day lapse in coverage, the insured is protected in regards to health insurance (here is more detail on HIPAA health insurance). 

Also, changes in the way health care providers handle your confidential information, according to HIPAA, make sure that patients’ privacy is protected. That is the short answer to what is the Health Insurance Portability and Accountability Act, but there is so much more to it.

What Is The Health Insurance Portability and Accountability Act’s Purpose?

For those who might ask, “What is the Health Insurance Portability and Accountability Act’s purpose?” I would have to answer that it serves more than one purpose:    

  • It protects the health insurance of workers who have lost or changed jobs.

  • It protects the privacy of health data collected by providers.

Not only does it provide for workers with private group or individual health insurance plans, but also for eligible temporary, federal, and public plans as well.  In protecting the privacy of patients, management of data collected is being improved upon using electronic means. 

What Is The Health Insurance Portability and Accountability Act Going to Accomplish For Families?

There was a time when if a person left a job; they had to leave the insurance behind them.  Gap, short term insurance, and COBRA are solutions implemented to cover the insured until they obtained another job where the new employer would pick up the new employees’ insurance.  If you had a pre-existing condition, or costly condition, you might fall into an exclusion category, meaning you could not get insurance through that carrier.  If you did you had to pay an exceptional amount more than you ordinarily would. 

With the Portability and Accountability Act, a pregnant spouse can shorten the time required for pre-existing conditions and receive medical treatment at the time of delivery when her husband starts his new job.  This is an example of the portability part of the equation.  The ability for medical personnel to mishandle information unintentionally or maliciously will be diminished with the accountability part of this law.  

What Is The Health Insurance Portability and Accountability Act in Relation To COBRA?

Cobra is considered an interim plan.  It qualifies as an acceptable insurance source when considering whether the applicant falls within the 63 day window.  Different types of insurance may raise the question as to whether or not it qualifies as a legitimate source of a previous plan, or gap plan.  Some of those plans include:

  • Medicare

  • Medicaid

  • CHAMPUS

  • Indian Health Service Plan

  • Federal Employees Health Benefits Plan (FEHB)

  • Any high risk pool

  • Any public plan

These plans don’t fall into your average private insurance category; therefore, it leaves room for high levels of exclusion of people who may carry one of the above plans.

What Is The Health Insurance Portability and Accountability Act in Relation to Health Insurance Companies?

Naturally insurance companies are not extremely happy about the HIPAA Act in that it enacts regulations to their industry.   If an enrollment requires 12 to 18 months wait time for pre-existing conditions, that wait time is decreased with this enactment.  If a person has a high risk condition, they can not be excluded.  These cases can of course become costly to the insurance company. 

Protected Health Information (PHI) must be sent to a patient within 30 days.  This requires more production time.  Health organizations have to convert their system of medical records management to support the data systems required to protect the privacy of patients.  This is another added expense.

What Is The Health Insurance Portability and Accountability Act of the Future?

Streamlining is a good word for what is happening in the health insurance industry.  Keeping pace with advance technology by electronically converting patient information is not only going to make it efficient for today’s health industry, but it will be efficient for tomorrow’s health care industry as well.  Information will travel the World Wide Web with speed and accuracy anywhere it needs to go.  When and if a national health care plan is established, the HIPAA Act will not be obsolete, but it will be apart of the evolution. 

Now that you know the answer to what is the Health Insurance Portability and Accountability Act, you are better informed to make your health insurance decisions. Go back to the top of the page, hit the quote tool, and start getting multiple health insurance quotes to meet your needs right away!