Health Insurance Standards: New Federal Law Creates Challenges for Consumers, Insurers, Regulators. HEHS-98-67. 30 pp. plus 6 appendices (18 pp.) February 25, 1998.

PDF (Adobe Acrobat) version

Text version

Excerpt:

In 1996, Congress passed the Health Insurance Portability and Accountability Act, considered by some to be the most significant federal health insurance legislation in more than a decade. The act guarantees people losing group health coverage, through retirement or other termination of employment, continued access to coverage in the individual market regardless of health status. But consumers attempting to exercise this right have been hindered by carrier practices and pricing or by their own misunderstandings of the law. Many have had difficulty obtaining individual market coverage with guaranteed access rights or faced significantly higher premiums for such coverage; some carriers charge premiums as much as 600 percent higher than standard rates. Other consumers do not realize that the access guarantee applies only to those losing group coverage who meet other eligibility requirements. For example, an individual must apply within 63 days of losing group coverage or the right to coverage is lost. Insurers believe that the act poses an excessive administrative burden, unanticipated consequences, and the potential for consumer abuse. State insurance regulators have encountered their own difficulties in attempting to implement and enforce the act's provisions where they found federal guidance to lack sufficient clarity or detail. Finally, federal regulators face an unexpectedly large regulatory role under the act. In states that have not yet passed legislation to implement the act, the Health and Human Services Department must step in to perform functions similar to those of a state insurance regulator, such as approving insurance products and responding to consumer complaints.