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The implementation of HIPAA resulted in significant improvements to consumer health coverage protections and established a new state-federal regulatory partnership, though its overall impact was limited by regulatory gaps, unintended consequences, and the incremental nature of the law. Novelty: ClaimNovelty.NOVEL_FINDING. Consensus alignment: ConsensusAlignment.NEUTRAL.

July 1, 2000

Early Experience With ‘New Federalism’ In Health Insurance Regulation

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Abstract

PROLOGUE: The insurance reform provisions of the Health Insurance Portability and Accountability Act (HIPAA) of 1996 created new minimum portability and enrollment protections for consumers. At the same time, the law changed the way health plans are regulated by the states and the federal government. However, HIPAA did not disturb existing market and regulatory divisions or address premium costs. Now, four years after the law's passage, employers and consumers are still routinely troubled by access to affordable health insurance. Policymakers wonder if the lessons learned from HIPAA's implementation will be useful in developing future insurance legislation, such as for managed care consumer protections. This paper is among the first to examine the impact of HIPAA's incremental reforms and how its national policy affects multiple insurance markets and regulatory jurisdictions. It finds that HIPAA resulted in major achievements and can be a base for future reforms. However, the law's provisions had gaps and also led to some unintended consequences. The authors are very familiar with insurance reform issues that affect consumers. Karen Pollitz is the project director and Elizabeth Hadley is an assistant professor with Georgetown University's Institute for Health Care Research and Policy. Nicole Tapay was an assistant professor with the institute when the paper was written; she currently is director of the Division of Benefits, Coverage, and Payment at the Health Care Financing Administration (HCFA). Jalena Specht also was on the institute's staff. ABSTRACT: The authors monitored the implementation of the Health Insurance Portability and Accountability Act (HIPAA) from 1997 to 1999. Regulators in all states and relevant federal agencies were interviewed and applicable laws and regulations studied. The authors found that HIPAA changed legal protections for consumers' health coverage in several ways. They examine how the process of regulating such coverage was affected at the state and federal levels and under an emerging partnership of the two. Despite some early implementation challenges, HIPAA's successes have been significant, although limited by the law's incremental nature.

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