We suggest that evaluating the market’s response to HIPAA eligibility be a major focus of the case studies. HIPAA was designed to eliminate practices that discriminate against employer groups and their members or individuals purchasing insurance. The case studies would identify strategies adopted by insurers to facilitate or circumvent HIPAA requirements. As the dominant players in the small group and individual health insurance markets, how insurers adapt to HIPAA will determine whether HIPAA eligibles actually receive HIPAA benefits.
Specifically, the case study would focus on how insurers market HIPAA coverage, including any steps insurers might take to discourage HIPAA coverage. For example, the interview protocol should determine whether insurers use financial incentives to brokers to discourage them from selling to HIPAA eligibles in the individual market or to high risk groups. Other incentives to investigate would include pricing and benefits coverage strategies that make HIPAA coverage unattractive, such as the use of long waiting periods for costly medical conditions, benefits limits or exclusions, restrictive riders, or a benefit design structure that artificially segments the market. The case study would also attempt to assess whether insurers have exited from certain markets.
Some reports have suggested that insurers have implemented new rating methodologies because of HIPAA’s pre-existing condition requirements and have increased premiums. The case studies would complement the quantitative measures of premium change described earlier. They would question insurers about the bases for their rating methodologies, particularly to assess the allegation by GAO that HIPAA-eligibles are charged higher rates because insurers expect this group to be in poorer health, on average, than other policyholders. The case study would question insurers about evidence that the HIPAA-eligible population is in fact at higher risk than other employees. The case study interview should attempt to understand other objections or problems insurers are experiencing with HIPAA-eligibles.
The case study would also interview employers to assess their responses to changes in product offerings and prices. For instance, have employers responded by implementing changes in covered benefits? Have employers been able to offer similar benefits at the same price?