The Health Insurance Portability and Accountability Act: More Than We Bargained for, and Less
By Tom Miller
When Congress passed the Health Insurance Portability and Accountability Act (HIPAA) in 1996, the legislation was marketed as a modest attempt to address health insurance portability problems facing insured workers who wanted to change jobs. So-called job-lock concerns involved workers who were worried about losing or being denied access to insurance due to their health status and therefore remained in existing jobs that provided group health insurance to them and their dependents.
Today, the bill's sponsors have good reason to be modest about its portability achievements: HIPAA provided little, if any, help to vulnerable consumers seeking more affordable health insurance options. It did create a false sense of security that lulled many buyers into getting less value for their insurance dollar. HIPAA tried to lock an outdated, employer-based insurance market structure into place. It stifled promising market innovations such as medical savings accounts (MSAs). Most recently, it has confronted proposed defined contribution health plans with legal uncertainties about how they might be regulated.
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