HIPAA, The Glaring Omission

By Ross Schriftman, RHU, LUTCF, ACBC, MSAA

The day that the U.S. House of Representatives began debating repeal of Obamacare the Secretary of Health and Human Services released a report claiming that there are between 50 million and 129 million non-elderly Americans with pre-existing medical conditions.  According to the report many of 

I am not sure why there would be such a wide range in the numbers of people with pre-existing conditions in this report but even on the low end of 50 million the report indicates that we have high health care costs in this country because we have a lot of sick people.  If the report is correct adding the high number of uninsured with conditions to health insurance coverage will most certainly cost lots of money and will result in higher premiums for everyone.  You can say that the need to get these people covered is an admirable goal.  You can’t say at the same time that adding them will reduce costs.

Listening to the debate on repeal I heard one Democratic member of Congress after another claim that if someone changes jobs and has a pre-existing condition they couldn’t get coverage with their new employer or that condition would not be covered.  Between their statements and the report from the Administration there is not one word mentioned of the protections most Americans already had prior to the passage of last year’s massive “reform” bill.

Fifteen years ago the bipartisan Health Insurance Portability and Accountability Act (HIPAA) was enacted.  This landmark legislation was also known as Kennedy (D-Mass.)/Kassebaum (R-Kansas)  The law guaranteed that if a person changed jobs the new employer’s health plan would cover them.  HIPAA eliminated pre-existing condition clauses for anyone who had coverage from their old employer for at least 18 months and didn’t have a break of more than 63 days in coverage.  It also required each state to set up mechanisms to provide that those who had group coverage could get individual coverage without being turned down or having a pre-existing condition clause applied under reasonable rules. In my state of Pennsylvania the Blue Cross Associations act as the insurer of last resort under HIPAA.

The omission of HIPAA in printed materials and debate by those who support Obamacare is a glaring and purposeful act.  It hurts the ability of millions of Americans to make informed decisions about their health, finances and careers.  For example a person who wanted to take a better job and has a sick child could listen to the debate and read the government report and unfortunately think that that the child’s condition would not be covered under the new employer’s health plan.  This person might then turn down the opportunity to get that better job.

Giving out wrong information by our government hurts the very people they claim that they want to help.  To the Republican members’ discredit I didn’t hear one word about HIPAA protections in their response during the debate.

Yes.  There are problems that need to be addressed with our current health care system.  But to make a case and tell people wrong information that can harm them is malpractice on the part of our government officials.




6 Responses

  1. Excellent point Ross!!!!

  2. I agree that the exclusion of HIPAA from the discussion is malevolent malpractice from those Obamacare advocates who rely on popular ignorance of the pre-Obamacare regulation of health insurance to move their agenda.

    However, I also think that we should be careful about suggesting that HIPAA solved the problem of employer-monopoly control of our health dollars. We want to eliminate this problem by giving the tax benefit to the individual.

    HIPAA and its predecessor, COBRA, when combined with an underwritten individual market leads to selection bias that increases the cost of employer-monopoly health benefits and makes risk-pooling in the individual market less effective than if the individual market was the market of first resort.

    Although the pre-Obamacare status quo was vastly superior to Obamacare, we don’t want to leave the impression that we thought it was hunky-dory, do we?

  3. Although it’s true that HIPAA protects most employees when they change jobs. But to my knowledge, HIPAA does not so protect when the new employer does not offer health insurance or the new employer’s plan doesn’t cover services needed by the newly hired employee. This gap is what PPACA was designed to fill.

  4. I agree with John. Jan, in most states, following the rules of HIPAA, if one has exhausted COBRA, (s)he can apply to the high risk pool with no pre-ex. One can also be accepted if at least two carriers would not accept the client with standard rates.

  5. Ross: Not only are most members of Congress unaware of this, but so was Sen. McCain in his presidential bid. Just this morning I lamented to my wife that I should have just shown up at McCain’s DC office to tell him how to respond to the pre-existing condition cannard. Then candidate Obama surely knew better, but wasn’t about to help his opponent. He probably knows now, but that still hasn’t stopped the misinformation.

    The glaring omission from HIPAA was portability of individual market plans, but one that can easily be remedied now with a tweak to this decade plus old law.

  6. I notice the word “premium” does not appear in these replies. Pre-existing condition exclusion is worthless if the patient has no income to pay the premium, whether COBRA, HIPAA or PPACA. That’s why the high-risk pools under PPACA are failing, and why Republicans are idiots if they propose high risk-pools and HIPAA as an alternative.

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