• Romney and HIPAA

    This is a TIE-U post associated with Karoline Mortensen’s Introduction to Health Systems (UMD’s  HLSA 601, Fall 2012). For other posts in this series, see the course intro.

    A couple of weekends ago a kerfuffle erupted in the health policy journalism wonk-o-sphere when Mitt Romney, on Meet the Press, said,

    Well, I’m not getting rid of all of healthcare reform. Of course, there are a number of things that I like in healthcare reform that I’m going to put in place. One is to make sure that those with preexisting conditions can get coverage.

    Since that’s a core component of Affordable Care Act, leading logically to the need for a mandate (or something like it), as well as subsidies (which, together, comprise the centerpiece of the law), you can imagine people were a bit confused. Some walking back ensued. You can read all about it elsewhere or even right here on TIE. The upshot is that Romney only intends to ban preexisting conditions exclusions for people who have continuous coverage.

    If you read up on this issue, you may see references to the 1996 Health Insurance Portability and Accountability Act (HIPAA), which seems to do the same thing. Does it? As luck would have it, Mortensen assigned a Kaiser Family Foundation primer that explains exactly what HIPAA does, which is far more than I will explain here. My focus is only on how the law addresses preexisting conditions. HIPAA does so differently in the group and individual markets. All quotes below are from the KFF primer.

    HIPAA makes plans in both markets guaranteed renewable. Once you’ve enrolled in a plan, you can’t be denied coverage the at time of renewal regardless of preexisting conditions.

    Group Coverage.  HIPAA makes it illegal for group plans to deny coverage due to preexisting conditions. Leaving aside some details,

    HIPAA requires state-licensed health insuring organizations [health insurers] providing group coverage and employee welfare benefit plans providing health benefits to limit preexisting condition exclusion periods to no more than 12 months. […]

    [T]he time between lapse of the previous coverage and enrollment in the new coverage must be shorter than 63 days.

    That is, provided you have no gap longer than 62 days, a group plan must accept you, but can deny claims for a preexisting condition for up to 12 months.

    Individual Coverage. No provisions of HIPAA apply to people participating in the individual market except those transitioning out of a group plan. However, for those that are transitioning from the group to the individual market, HIPAA requires individual market plans to accept them

    regardless of their health status and without any exclusion period for preexisting medical conditions. To be eligible, the person must not be eligible for other public or private group health coverage, must have been previously covered for a period of at least 18 months, must apply for the individual coverage within 63 days of leaving the group coverage, and must have exhausted any federal or state continuation rights under their group policy [e.g., COBRA].

    The above is explained more tersely by Families USA. The upshot is that there is a lot of room for Romney to maneuver here. Portability is not guaranteed within the individual market, just within the group market and for group-to-individual market transitions. In group markets, plans can impose up to a 12 month waiting period for benefits for preexisting conditions. Romney could take a position to change all that.

    What neither HIPAA nor Romney address — both intentionally so — is whether group or individual market products are affordable. Even if and when they have to accept you and cover your preexisting conditions, you might not be able to pay the price. And, according to both HIPAA and Romney’s vision, if you don’t have continuous coverage (less than a 63-day gap in the case of HIPAA), there’s no guarantee that an individual market plan will accept you.

    @afrakt

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    • I think that the HIPAA rules for group plans are a little different than you suggest, leaving less room for Romney to make helpful changes. It is my understanding that if someone has continuous coverage in a group plan (at least 12 months of continuous coverage with no more than a 63 day break in coverage), a new group plan cannot impose any preexisting condition limit. So a person with continuous group coverage already has no preexisting condition issue at all, and Romney cannot make any changes in law to improve that situation. Perhaps Romney intends to do something in the individual market, but cost of the policy might make such guaranteed coverage irrelevant.

      If the person does not have continuous coverage, then a group policy may impose up to a 12-month waiting period before preexisting conditions will be covered (with a few exceptions, such as pregnancy and certain children). Your description seemed to confuse the rule for group policies where a person has no continuous coverage (and a group plan can deny preexisting condition coverage for up to 12 months) with the rule where a person has continuous coverage (and a group plan cannot impose any limit on preexisting conditions).

      • Though I am not challenging your interpretation (on the contrary, it sounds plausible to me), it’d be handy if you could provide a source for it. I’ve based my post on the sources I link to. Still, as I acknowledge, I am leaving aside many details. That’s what the links are for. In particular, the KFF one says this:

        For eligible individuals leaving group coverage for another group plan, any preexisting condition exclusion period must be reduced by the number of days that a newly enrolling person was previously covered by public or private health coverage.

    • That rule you describe is the same as the rule that I am describing. I think you are interpreting it incorrectly. In other words, the basic rule is that a group plan can make you wait 12 months until it covers preexisting conditions. But if you have “continuous coverage” (less than 63 day break) prior to entering the new group plan, your waiting period is reduced by your length of participation in the prior plan. Thus, if you were covered for at least 12 months in the prior plan, the preexisting condition waiting period is reduced to 0. Similarly, if you were covered for only 3 months in the prior plan, the preexisting condition waiting period would be 9 months in the new plan. The following link from a DOL fact sheet makes this point.

      http://www.dol.gov/ebsa/newsroom/fshipaa.html

      • We’re on the same page. Notice that I wrote,

        Leaving aside some details, “HIPAA requires state-licensed health insuring organizations [health insurers] providing group coverage and employee welfare benefit plans providing health benefits to limit preexisting condition exclusion periods to no more than 12 months.”

        And the details, which I’ve now quoted and you agree with, are at the link in the post. It’s all there!