Companies Have Eliminated Their Health

¶ … companies have eliminated their health plans or have reduced benefits. At the same time, job security has become less reliable, resulting in more and more people changing jobs and losing whatever health coverage they may have had. One of the concerns raised has been that people cannot keep the insurance they have if they change jobs and that this will contribute to the already-growing rolls of people with no health insurance at all. The Health Insurance Portability and Accountability Act of 1996 (HIPAA) was enacted to address this issue.

The law was enacted on August 21, 1996 (Public Law 104-19) and provides for improved access and renewability with respect to employment-related group health plans, to health insurance coverage sold in connection with group plans, and to the individual market by amending the Public Health Service Act. Among the provisions in the Act are enhanced portability and continuity of health insurance coverage; provisions for combating waste, fraud, and abuse in health insurance and health care delivery; the promotion of the use of medical savings accounts; the improving of access to long-term care services and insurance coverage; administrative simplification; and provisions for addressing duplication and coordination of Medicare benefits (DiSimone, 2004).

The purpose for the Act is stated in its opening, as follows:

To amend the Internal Revenue Code of 1986 to improve portability and continuity of health insurance coverage in the group and individual markets, to combat waste, fraud, and abuse in health insurance and health care delivery, to promote the use of medical savings accounts, to improve access to long-term care services and coverage, to simplify the administration of health insurance, and for other purposes (Public Law 104-191, 1996).

These are important goals and also massive ones, and no one law can address all these issues and do so in a definitive manner. The primary elements in the legislation for most workers are portability and a general improvement in coverage, and critics have pointed out that the law falls short on these issues. In terms of portability, for instance, Lieberman (1997) writes, "Employees who think they can take their insurance to new jobs are in for a shock: they can't, despite what the media have told them" (Lieberman, 1997, p. 50). Lieberman sees the law as more symbolic than effective, noting that it was passed to address one much-publicized aspect of the health insurance problem, the problem of making sure workers who lose or change jobs do not lose their medical insurance coverage because of pre-existing health conditions. The bill's sponsors and supporters set out to do this and persuaded the public that the bill would somehow make health insurance "portable," though in truth, the law does not allow anyone to take his existing health insurance to a new job: It does make it easier for workers who had group coverage to get new insurance without satisfying a waiting period because of a pre-existing condition. But regardless of what the public heard or read repeatedly, only workers (or their dependents) with such conditions are affected by the law. For workers who lose group coverage and need individual policies, the law sets up formidable hurdles. So far, says an aide to Congressman Pete Stark, a California Democrat active in health reform, "Anyone who calls this office falls outside the bill" (Lieberman, 1997, p. 50).

Epstein (2002) notes some of the unintended consequences of HIPAA with reference to medical research. He cites the provisions on privacy and finds a conflict "between the concern for privacy on the one hand, and the ability of medical scientists, physicians, and institutions to continue on with their traditional research activities" (Epstein, 2002).

Under the new rules, it is assumed that everyone needs to obtain consent for the disclosure or use of any particular medical record for any kind of purpose, and when HIPAA does distinguish among purposes, it does so based on the needs of the individual. In terms of medical research, there are no direct patient benefits involved but only more general benefits for everyone, so the regulations impose tougher requirements on disclosure. This can make the process more difficult and even impossible in some situations.