A Different Kind of 'New Federalism'? The Health Insurance Portability and Accountability Act of 1996

Health Affairs

Volumn 17, Issue 3, 1998, Pages 25-42

  Nichols, Len M ^a   Blumberg, Linda J ^b  

^a URBAN INSTITUTE   (United States)

^b NONE

Author keywords

[No Author keywords available]

Indexed keywords

ARTICLE; CAREER MOBILITY; GOVERNMENT; HEALTH CARE PLANNING; HEALTH CARE POLICY; HEALTH INSURANCE; HEALTH MAINTENANCE ORGANIZATION; HUMAN; LEGAL ASPECT; MEDICARE; PENSION; UNITED STATES;

CAREER MOBILITY; EMPLOYEE RETIREMENT INCOME SECURITY ACT; HEALTH BENEFIT PLANS, EMPLOYEE; HEALTH CARE REFORM; HEALTH MAINTENANCE ORGANIZATIONS; HEALTH POLICY; HUMANS; MEDICARE; STATE GOVERNMENT; STATE HEALTH PLANS; UNITED STATES;

EID: 0346205458     PISSN: 02782715     EISSN: None     Source Type: Journal    
DOI: 10.1377/hlthaff.17.3.25     Document Type: Article

References (46)

1. B.K. Atchinson and D.M. Fox, "The Politics of the Health Insurance Portability and Accountability Act," Health Affairs (May/June 1997): 146-150.
2. R.E. Moffit, "What to Do about the Kassebaum-Kennedy Bill," Heritage Foundation Issue Bulletin 226 (5 June 1996).
3. See A. Kondratas, A. Weil, and B. Goldberg, "Assessing the New Federalism: An Introduction," in this volume, for details on the project.
4. United States v South-Eastern Underwriters Association, 322 U.S. 533 (1944).
5. 59 Stat. 33 (1945), 61 Stat. 448 (1947), 15 U.S.C.A. sec. 1101, 1012 (1987).
6. P.L. 93-222.
7. Note, "The Role of Prepaid Group Practice in Relieving the Medical Care Crisis," Harvard Law Review (February 1971): 886-1001.
8. P. Starr, The Social Transformation of American Medicine (New York: Basic Books, 1982), 198.
9. Ibid., 202.
10. E.H. Forgotson et al., "Innovations in the Organization of Health Services: Inhibitive vs. Permissive Regulation," Washington University Low Quarterly 1 (1967): 400, 413, quoted in Note, "The Role of Prepaid Group Practice."
11. U.S. Department of Labor, "PWBA History and ERISA," www.dol.gov/pwba/ public/aboutpwba/history4.htm (March 1998).
12. R.R. Bovbjerg and W.G. Kopit, "Coverage and Care for the Medically Indigent: Public and Private Options," Indiana Law Review 19, no. 4 (1986): 857-917. Sen. Inouye said that ERISA's preemption of state regulation of private health plans was the product of "inadvertent legislative oversight." See, for example, D.M. Fox and D.C. Shaffer, "Semi-Preemption in ERISA: Legislative Process and Health Policy," American Journal of Tax Policy (Spring 1988): 47-69.
13. R.R. Bovbjerg and W.G. Kopit, "Coverage and Care for the Medically Indigent: Public and Private Options," Indiana Law Review 19, no. 4 (1986): 857-917. Sen. Inouye said that ERISA's preemption of state regulation of private health plans was the product of "inadvertent legislative oversight." See, for example, D.M. Fox and D.C. Shaffer, "Semi-Preemption in ERISA: Legislative Process and Health Policy," American Journal of Tax Policy (Spring 1988): 47-69.
14. N.Y. State Conference of Blue Cross and Blue Shield Plans et al. v Travelers Insurance Company et al., 514 U.S. 645 (1995), and the cases, recitation of congressional intent, and legislative history cited therein.
15. M.S. Gordon, "The History of ERISA's Preemption Provision and Its Bearing on the Current Debate over Health Care Reform" (Presentation at the George Washington University's National Health Policy Forum, Washington, D.C., 18 November 1992), as cited in "Health Care Reform: Managed Competition and Beyond," Employee Benefit Research Institute Issue Brief 135 (March 1993). Michael Gordon, a former counsel to the late Senator Javits and the Senate Labor and Public Welfare Committee, helped to draft the ERISA legislation.
16. M.S. Gordon, "The History of ERISA's Preemption Provision and Its Bearing on the Current Debate over Health Care Reform" (Presentation at the George Washington University's National Health Policy Forum, Washington, D.C., 18 November 1992), as cited in "Health Care Reform: Managed Competition and Beyond," Employee Benefit Research Institute Issue Brief 135 (March 1993). Michael Gordon, a former counsel to the late Senator Javits and the Senate Labor and Public Welfare Committee, helped to draft the ERISA legislation.
17. They are allowed to buy stop-loss insurance for their plans, and most do.
18. Federal legislation addressing these coverage gaps was famously passed and repealed in the so-called Medicare catastrophic coverage debates of 1988-1989. See M. Moon, Medicare Now and in the Future (Washington: Urban Institute Press, 1997), for a useful summary of the issues.
19. G.S. Chulis et al., "Health Insurance and the Elderly: Data from MCBS," Health Care Financing Review (Spring 1993): 163-181.
20. L.A. McCormack et al., "Medigap Reform Legislation of 1990: Have the Objectives Been Met?" Health Care Financing Review (Fall 1996): 157-174.
21. P.L. 96-265.
22. McCormack et al., "Medigap Reform Legislation of 1990."
23. Blue Cross and Blue Shield Association, State Legislative Health Care and Insurance Issues: 1996 Survey of Plans (Chicago: BCBSA, 1997).
24. See L.J. Blumberg and L.M. Nichols, "First, Do No Harm: Developing Health Insurance Market Reform Packages," Health Affairs (Fall 1996): 35-53, for a discussion of many health insurance reform options.
25. See L. Nichols et al., Small Firms, Their Diversity, and Health Insurance (Washington: Urban Institute Press, 1997).
26. L. Dubay and G. Kenney, "Did Medicaid Expansions for Pregnant Women Crowd Out Private Coverage?" Health Affairs (January/February 1997): 185-193; and J. Holahan, "Crowding Out: How Big a Problem?" Health Affairs (January/February 1997): 204-206.
27. L. Dubay and G. Kenney, "Did Medicaid Expansions for Pregnant Women Crowd Out Private Coverage?" Health Affairs (January/February 1997): 185-193; and J. Holahan, "Crowding Out: How Big a Problem?" Health Affairs (January/February 1997): 204-206.
28. However, unlike fully insured plans, post-HIPAA ERISA plans will still be able to change the structure and amount of benefits for any particular services and diagnoses (see H&H Music v McGann, U.S. Court of Appeals, 5th Circuit, 4 November 1991), since HIPAA neither does nor does not allow state law to constrict these plans' ability to redesign their benefit packages.
29. This point is made by Haynes Johnson and David Broder in their book, The System: The American Way of Politics at the Breaking Point (Boston: Little, Brown and Company, 1996), 62-63.
30. The relevent federal agencies made this even more clear in regulations. See "Interim and Final Rule Issued by the Department of Health and Human Services Covering Portability from Group to Individual Coverage, Federal Rules for Access in Individual Market, and State Alternative Mechanisms to Federal Rules," Health Care Policy Report, Supplement (Washington: Bureau of National Affairs, 7 March 1997): 5.
31. P.F. Cooper and A. Monheit, "Does Employment-Related Health Insurance Inhibit Labor Mobility?" Inquiry (Winter 1993): 400-416; and B. Madrian, "Employment-Based Health Insurance and Job Mobility: Is There Evidence of Job-Lock?" Quarterly Journal of Economics (February 1994): 27-54.
32. P.F. Cooper and A. Monheit, "Does Employment-Related Health Insurance Inhibit Labor Mobility?" Inquiry (Winter 1993): 400-416; and B. Madrian, "Employment-Based Health Insurance and Job Mobility: Is There Evidence of Job-Lock?" Quarterly Journal of Economics (February 1994): 27-54.
33. COBRA (P.L. 99-272) of 1986 requires firms of twenty or more workers to offer persons with qualifying events continuing insurance coverage. There are two types of qualifying events: work-related and family-related. Work-related events are voluntary or involuntary termination of employment or a decrease in the number of hours worked, resulting in loss of coverage. Family-related events are divorce, legal separation from or death of an insured worker, loss of dependent child status, or loss of dependent coverage because of the worker's Medicare entitlement. COBRA coverage is available for up to eighteen months for work-related events (twenty-nine months for disability-related events) and thirty-six months for family-related events. See P. Flynn, "COBRA Qualifying Events and Elections, 1987-1991," Inquiry (Summer 1994): 215-220.
34. American Academy of Actuaries, "Comments on the Effect of S. 1028 on Premiums in the Individual Health Insurance Market" (Washington: AAA, 20 February 1996); and T. Stoiber, "Estimating the Impact of S. 1028 - Premiums in the Individual Insurance Market" (Testimony on reforming the small-business marketplace and the individual market, before the House Commerce Subcommittee on Health and the Environment, 7 March 1996).
35. American Academy of Actuaries, "Comments on the Effect of S. 1028 on Premiums in the Individual Health Insurance Market" (Washington: AAA, 20 February 1996); and T. Stoiber, "Estimating the Impact of S. 1028 - Premiums in the Individual Insurance Market" (Testimony on reforming the small-business marketplace and the individual market, before the House Commerce Subcommittee on Health and the Environment, 7 March 1996).
36. J. Musser, testimony of the National Association of Insurance Commissioners' (Ex) Special Committee on Health Insurance before the House Ways and Means Subcommittee on Health, on HIPAA implementation, 25 September 1997.
37. Although Colorado will rely on the federal floors established in HIPAA, Massachusetts has an alternative mechanism that includes the offer of three uniform products by all carriers to all eligibles.
38. In the case of Alabama, the high-risk pool separates federal eligibles from all others.
39. NAIC, Model Health Plan for Uninsurable Individuals Act, I-85-1. The standard rate is the premium that would be charged in the nongroup market to a person of average risk.
40. There is, however, a provision of HIPAA that requires a state using an alternative mechanism other than a high-risk pool that does not adopt a relevant NAIC model act to "provide for risk adjustment, risk spreading, or a risk spreading mechanism or otherwise provide for some financial subsidization for eligible individuals." The legislation does not specify the type of risk spreading required, nor does it specify the magnitude of the redistribution.
41. AAA, "Comments on the Effect of S. 1028 on Premiums;" Stoiber, "Estimating the Impact of S. 1028;" and J. Klerman, "New Estimates of the Effect of Kassebaum-Kennedy's Group-to-Individual Conversion Provision on Premiums for Individual Health Insurance," RAND Research Report, RAND/DRR-B41-1-DOL (Santa Monica, Calif.: 1996).
42. AAA, "Comments on the Effect of S. 1028 on Premiums;" Stoiber, "Estimating the Impact of S. 1028;" and J. Klerman, "New Estimates of the Effect of Kassebaum-Kennedy's Group-to-Individual Conversion Provision on Premiums for Individual Health Insurance," RAND Research Report, RAND/DRR-B41-1-DOL (Santa Monica, Calif.: 1996).
43. AAA, "Comments on the Effect of S. 1028 on Premiums;" Stoiber, "Estimating the Impact of S. 1028;" and J. Klerman, "New Estimates of the Effect of Kassebaum-Kennedy's Group-to-Individual Conversion Provision on Premiums for Individual Health Insurance," RAND Research Report, RAND/DRR-B41-1-DOL (Santa Monica, Calif.: 1996).
44. U.S. General Accounting Office, "Health Insurance Standards: New Federal Law Creates Challenges for Consumers, Insurers, Regulators," GAO/HEHS-98-67, Report to the Chairman, Committee on Labor and Human Resources, U.S. Senate (Washington: U.S. GAO, February 1998).
45. S. Zuckerman and S. Rajan, "Is Insurance Reform Reducing the Rate of Uninsurance? Evidence from the Current Population Survey," Urban Institute Working Paper (Washington: Urban Institute, November 1997).
46. See A. Leibowitz, C. Damberg, and K. Eyre, "Multiple Employer Welfare Arrangements," in Health Benefits and the Workforce, U.S. Department of Labor/Pension and Welfare Benefits Administration (Washington: U.S. GPO, 1992).