What Is HIPAA?
If you've been to the doctor's office, pharmacy, hospital or another healthcare provider in the last few years, you've probably been given information about HIPAA, the Health Insurance Portability and Accountability Act of 1996. HIPAA is a group of laws at the federal level designed to help Americans who may have existing medical conditions maintain healthcare insurance when they change jobs or insurance coverage.
You've probably received information about HIPAA and your rights to privacy during visits to your doctor; you may have also been told that your health information is private, but will be shared with your health insurance provider — or you've been given materials about how your privacy will be protected. HIPAA is often evident in other ways as well, such as when you're asked to wait behind a line when waiting to talk to a pharmacist in order to prevent others from overhearing a private conversation.
What Does It All Mean?
In essence, HIPAA is designed to prevent discrimination against people who may have difficulty obtaining health insurance for a wide variety of reasons. In the past, an individual with a health issue may have been denied new coverage based on a medical condition (or pre-existing condition), or because she has a large number of insurance claims. In other cases, people who sought treatment for conditions were denied a renewal on their health insurance policy.
HIPAA is designed to prevent individuals from being denied health insurance coverage from employer sponsored plans, and it's also intended to protect individuals by keeping their healthcare information private. For individuals who still have difficulty obtaining health insurance, HIPAA provides opportunities to enroll in group healthcare plans.
HIPAA is federal legislation, but each state has its own legislation that varies slightly. State laws may be more generous than federal laws, or offer only what is required by HIPAA. Even with HIPAA, some individuals will still have difficulty obtaining health insurance; however, for many Americans, the HIPAA laws have made it possible to obtain health insurance coverage from their place of employment.
Why Is HIPAA Important?
In addition to making it easier for individuals to maintain health insurance coverage, HIPAA makes it illegal to discriminate against or deny coverage to pregnant women, newborns, adopted children under the age of 18, and people who have a genetic predisposition for — but have not yet been diagnosed with — a disease.
HIPAA makes it easier to change jobs without fear of losing health insurance coverage due to the move from one employer to another.
In addition, HIPAA does not just cover the employee seeking insurance; it also prevents discrimination against family members who would be covered by the plan.
For people with a pre-existing condition, insurance companies are only allowed to look at the last 6 months of healthcare when determining if someone can be excluded for a pre-existing condition. For someone who had a serious illness a year ago or even a decade ago, such as open heart surgery, this diagnosis cannot be used to exclude them from coverage.
HIPAA restricts access to your medical records to only those individuals and companies that have a right to see the information, such as your insurer, your caregivers and your insurance company.
While a health insurance company can require you to have a physical exam prior to coverage, the company may not restrict your coverage or increase your premiums based on that physical examination.
What HIPAA Doesn't Do
HIPAA cannot make your employer offer health insurance. If your place of business does not offer health insurance — or you are a part-time employee and coverage is only offered to full-time employees — HIPAA will not make insurance available to you. HIPAA is primarily about helping people maintain coverage, not necessarily obtaining new coverage after a significant lapse, or dictating what is covered by an insurance policy.
If you've been treated for a condition in the last six months, the insurance company still has the right to restrict coverage for that particular condition. This means that if you are diabetic, and you've been treated for your diabetes in the last 6 months, your new insurer could potentially restrict coverage for insulin, testing supplies, syringes and other costs related to diabetes.
HIPAA does not mandate what conditions are covered. If your employer does not offer coverage for a specific condition, such as infertility, HIPAA cannot force the employer to add coverage to the plan.
More reading: 11 HIPAA Myths
FAQs About Portability of Health Coverage and HIPAA. United State Department of Labor. Accessed December 2012. http://www.dol.gov/ebsa/faqs/faq_consumer_hipaa.html#.UNz7Kxzgz18