Vol. 28, No. 1 #7 (February 2005). HIPAA: An Individual Friendly Concept; Not an Individual-Friendly Law.

• Author: By Angela M. Stewart

Wyoming Bar Journal

2005.

Vol. 28, No. 1 #7 (February 2005).

HIPAA: An Individual Friendly Concept; Not an Individual-Friendly Law

WYOMING LAWYERFebruary 2005/Vol. XXVIII, No. 1HIPAA: An Individual Friendly Concept; Not an Individual-Friendly LawBy Angela M. Stewart

The Health Insurance Portability and Accountability Act (HIPAA) was passed by Congress on August 21, 1996(fni) to address major problems in health care, including job lock, which occurs when an individual will not change jobs for fear of losing health benefits,(fnii) and improper access to individuals' personally identifiable health information.(fniii) The noble purpose that Congress stated for HIPAA was: [T]o 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."(fniv)

HIPAA is a broad and expansive statute covering many aspects of health care. The five titles of HIPAA are: Health Care Access, Portability, and Renewability; Preventing Health Care Fraud and Abuse, Administrative Simplification, Medical Liability Reform; Tax Related Health Provisions; Application and Enforcement of Group Health Plan Requirements; and Revenue

Offsets.(fnv) This piece will address Title I of HIPAA, which was to deal with job lock among other things. There will be an additional HIPAA piece in the March issue of the Wyoming Lawyer.

Recognizing the problems with health care coverage in the U.S., Congress attempted to remedy some of those problems through the passage of this act. The General Accounting Office (GAO) noted in a Letter Report to Congress:

Millions of Americans face discontinuity in their health care coverage when they change employers, and others do not change jobs because of concerns about losing health care coverage. In fact, individuals with health problems may face extended periods in which their new health plan does not cover their medical conditions because of exclusions for preexisting conditions.

We estimate that up to 21 million Americans a year would benefit from federal legislation that would waive preexisting condition exclusions for individuals who have had continuous health care coverage. In addition, perhaps as many as 4 million Americans who at some time have been unwilling to leave their jobs because of concern about losing their health care coverage would benefit from national portability standards. Such a change, however, could possibly increase premiums, according to insurers.vi

This piece focuses on sections of Title I of HIPAA, which addresses "Health Care Access, Portability, and Renewability."(fnvii) While HIPAA has a noble purpose and a seemingly sincere backdrop, Title I of HIPAA does not go far enough to protect individuals. A major problem with HIPAA is that practitioners do not fully understand HIPAA mandates and individuals have no way of understanding their rights and responsibilities under the act. This article is meant to provide a basic understanding of HIPAA's preexisting condition exclusion and the prohibition on discrimination based on health status, both of which are found in Title I of HIPAA.

Title I deals specifically with portability, access, and renewability in group health plans.(fnviii) Group health plan is defined as "an employee welfare benefit plan to the extent that the plan provides medical care . . . to employees and their dependents . . . directly or through insurance, reimbursement, or otherwise."(fnix) If an individual is a member of a health insurance plan through that individual's employer, he or she is deemed to be in a group health plan.

Preexisting Condition Exclusions

One aim of HIPAA is to increase portability through limitations on "preexisting condition exclusions,"(fnx) defined as "a limitation or exclusion of benefits relating to a condition based on the fact that the condition was present before the date of enrollment for such coverage, whether or not any medical advice, diagnosis, care, or treatment was recommended or received before such date."(fnxi)

HIPAA limits when insurance companies can impose exclusions. Insurers can only impose an exclusion if:

1. such exclusion relates to a condition (whether physical or mental), regardless of the cause of the condition, for which medical advice, diagnosis, care, or treatment was recommended or received within the 6- month period ending on the enrollment date;

2. such exclusion extends for a period of not more than 12 months (or 18

   months in the case of a late enrollee) after the enrollment date; and

3. the period of any such preexisting condition exclusion is reduced by the

   aggregate of the periods of creditable coverage . . . applicable to the

   participant or beneficiary enrollment date.(fnxii)

   Essentially, the first point establishes a 6-month look-back period for the insurance provider to inquire about preexisting conditions. If an individual received "medical advice, diagnosis, care, or treatment" or if any of those were recommended within a 6-month time frame before enrolling for coverage, the insurance provider can impose an exclusion and not cover that condition.(fnxiii) Any conditions that were not diagnosed, cared for, or treated (or recommended to be diagnosed, cared for, or treated) within that 6-month window, the insurance provider cannot impose an exclusion on that specific condition. However, all of these restrictions are still subject to the terms of the provider's policy. If a condition is excluded from coverage for all individuals, then the provider can make that exclusion across the...