The Health Insurance Portability and Accountability Act, commonly referred to as HIPAA, was established in 1996 as a means of protecting consumers in regards to their insurance rights.
The basic premise of the Health Insurance Portability and Accountability Act was to protect those individuals that had major health issues. Before the act, many insurance companies were dropping consumers from their plans after they had cost the company so much money. This of course, would aid in their profitability scheme, but it was creating major issues for these consumers that were unable to work because of their condition, but now would have mounting medical bills because they were dropped from their insurance. The HIPAA was written to address this issue.
Under HIPAA, insurance providers are now no longer able to drop a consumer from their plan unless they have sufficient reasoning to do so. Insurance companies must continue to support these patients, and renew them at their current premium, covering all of their previous conditions. Just because a consumer cost the company more money due to their medical issues, doesn’t mean that an insurance company is capable of raising their premium. They must be afforded the same premium that others are paying.
It is also now written in the act that insurance companies can longer discriminate when offering insurance. They have to give everyone the same basic right to insurance coverage and they can’t charge a different premium based on the medical conditions that any consumer has. This is to ensure that all consumers are charge the same amount regardless and will ensure that more Americans are covered by an insurance plan.
Also, in order to provide more insurance across the board and make it more accessible, the act also included provisions for small to medium sized businesses to obtain better premiums by establishing limitations to what insurance companies can charge employers for insurance offerings to their employees. This was established in order to allow smaller businesses to offer the same types of insurance that larger businesees do without having to pay out substantial costs to set the plan up. The move was intended to increase insurance throughout the country and eliminate some of the issues related to lack of insurance by consumers.
Overall, the act has provided significant provements to the previous methods that insurance companies were using. By making insurance companies more accountable, consumers are better protected and provided for, especially when they need it the most. This has created a huge improvement in the quality of insurance in the United States and has aided those with serious medical conditions in getting back on their feet without the massive medical bills that they would have had if their insurance company would have dropped them.