The Health Insurance Portability and Accountability Act has not been as effective as hoped in providing insurance for consumers who lose group coverage, according to a General Accounting Office report released last week.
The report, which was requested by Sen. James Jeffords (R-Vt.), the chairman of the Senate Labor and Human Resources Committee, said both consumers and insurers have concerns about the implementation of the HIPAA.
Consumers have experienced "difficulty obtaining individual market coverage with guaranteed access rights, or they paid significantly higher rates for such coverage," the report said.
The GAO cited numerous ways that insurance carriers discourage consumers from receiving coverage under the HIPAA including charging premiums that are 140% to 600% higher than their standard premiums, the agency said.
The Alliance for Health Reform, a bipartisan educational group that addresses health policy issues, said the price inflation is not surprising.
"The rate problems are ones that everyone predicted," said Ed Howard, executive vice president for the Washington-based group.
Still, the American Medical Association, which supported the HIPAA, is "disappointed and distressed" by the GAO's findings. "You don't become 600% more at risk because you move from one employer to another," said an AMA spokes-person. "We were very proud of (the act). We thought it would help people. It's disheartening to see that it's not having the effect that we had hoped."
Signed into law in August 1996, the HIPAA requires insurers to provide health insurance to individuals -- regardless of their health status -- when they lose employer coverage because of a job transition. Most HIPAA provisions took effect July 1, 1997.
The report said that some consumer dissatisfaction with the HIPAA may result from misunderstanding its eligibility requirements. The law guarantees access only to individuals who have at least 18 months of previous health coverage, most recently under a group health plan, without a break of more than 63 days.
Insurers also are discontented with the HIPAA because they believe consumers may abuse certain protections, the report said. For example, insurers fear that consumers may "forgo coverage until they become ill."
Insurers also are concerned by the guaranteed renewal provision, which does not permit them to cancel coverage for individuals who are eligible for other programs like Medicare.
HHS is reviewing these concerns and discussing possible changes to the HIPAA, according to the GAO report.
The American Hospital Association, which also supported the legislation, said that it is too soon to tell the long-term effects of the law. "All of us are looking for better guidance and clarity in the regulations," said Mary Grealy, senior Washington counsel for the association. "We expect that to happen."