The Health Insurance Portability and Accountability Act of 1996, HIPAA, is a law that has a huge impact if you are looking for an individual health insurance policy, especially if you or someone in your family has a pre-existing condition. Knowing the laws and your rights will help you be better informed and more confident when searching for your own personal health insurance. Let’s take a look at what used to happen in the insurance industry and what was resolved by the HIPAA act.

The Past

An individual switched jobs and was denied coverage under the new employers health insurance plan because there was a pre-existing condition recorded under the previous employers health insurance plan. The new insurance company did not want to take on this liability. There was no law stopping the insurance company from denying coverage due to a pre-existing condition. Health insurance companies simply did not insure people with pre-existing health conditions even though they had insurance with their previous employers.

Insurance companies were looking out for their bottom line. They are in business to make money, so they saw this denial of coverage for individuals with pre-existing conditions as a way to protect their assets. This is where the portability comes in.

The Present

Today, insurance companies must honor the previous coverage for individuals, barring the individual did not have a lapse in health insurance coverage for longer than a set amount of time. This means that even a person with diabetes, diagnosed under their previous insurance plan, must still be covered under the new plan if all of the conditions defined in HIPAA are met.

The Future

In today’s world, there is also great concern about patient privacy. Words and numbers fly across cyberspace faster than we can imagine and private information can be compromised in an instant.

HIPAA is also on this curve, staying current with new technology. The HIPAA law requires companies to abide by certain safety criteria when it comes to handling personal information. HIPAA sets guidelines about what steps need to occur before information can be sent over the Internet.

Because of this safety net thrown out by the HIPAA law, there has been a reduction in health insurance fraud and abuse while also mandating standards throughout the industry for electronic billing and account updates.

The HIPAA laws are worth knowing and will provide you with the information you need when it comes to questioning health insurance companies about their HIPAA policies.
Before you begin looking for any individual health insurance coverage, read up on the HIPAA laws so you know the questions to ask to make sure your personal information will be protected.