In 1996, Congress passed the Health Insurance Portability and Accountability Act (HIPAA) which ensures access to insurance for some employer groups and individuals who previously were unable to purchase adequate coverage. The Department of Health and Human Services is mandated to report to Congress on the effects. An evaluation of the effects of HIPAA on the insurance coverage of the population, on the premiums charged for policies, and on the characteristics of insurance products available depends on a detailed understanding of the state regulatory and market context in which the federal standards and provisions are implemented. The Health Care Financing Administration contracted with RAND and the Institute for Health Policy Solutions (IHPS) to develop the contextual information needed for an evaluation and to develop a design for the evaluation.
The project included four central tasks:
- Develop a database to describe the regulatory environment in each state prior to HIPAA and to measure regulatory actions states have taken to comply with HIPAA’s requirements.
- Review the literature to address issues that have arisen during HIPPA’s implementation and summarize the expected effects of HIPAA’s provisions.
- Review the strengths and weaknesses of extant data that might be used in the HIPAA evaluation.
- Develop a plan to evaluate the effects of HIPAA on the accessibility and affordability of insurance in the group and individual insurance markets.
RAND and IHPS collaborated on the design of the database; IHPS conducted the necessary regulatory review, data abstracting, and data coding to complete the database. It describes in detail the small group and individual insurance market provisions in each state in 1996 and 1997 and thus provides a comprehensive picture of each state’s regulatory environment prior to the HIPAA legislation. The database also describes some key market characteristics that we believe may be important factors mediating the effects of regulatory changes stemming from the HIPAA legislation.
This report is the final report covering the other three project tasks. This work was carried out by RAND. Part II of this report summarizes the literature review, emphasizing the potential effects of HIPAA on access to insurance, the affordability of coverage, insurance benefit design, and employment effects.
Part III then reviews existing databases that might provide the information to conduct an evaluation of the magnitude of these effects. We examine four types of databases: population surveys, employer surveys, insurer databases, and policy databases. For each database we describe availability, scope of coverage, reference periods, data collection method, and key content related to a HIPAA evaluation. We also present a brief narrative comparing the utility of the different databases for the evaluation.
Finally, Part IV of this report presents a proposed evaluation design. For each of the key outcome areas—access, premiums, benefit design, employment—we present a small number of key implementation and outcomes questions accompanied by an approach or approaches to answer the question. Thus, our design is modular; subsets of questions and approaches can be selected to comprise a complete evaluation.