The Health Insurance Portability and Accountability Act of 1996 (HIPAA) requires the Department of Health and Human Services to report on the effectiveness of the Title I provisions of HIPAA in providing access to health insurance and ensuring coverage security for the currently insured. This document describes components of a design for undertaking such an evaluation. The design builds on the literature review and database review described in earlier parts of this report, and on the policy database developed by the Institute for Health Policy Solutions (IHPS) as part of this project. The (IHPS) database describes the pre- and post-HIPAA status of group and individual insurance market provisions in each state and so identifies states in which the HIPAA legislation resulted in important insurance market changes.
Our approach to evaluation design is to identify a small number of key implementation and outcome questions that relate to access, premiums, benefits, or employment--the key outcomes addressed in our literature review. We suggest an approach or approaches to answer each question. Thus our proposed evaluation design is modular; a subset of the suggested modules may be combined to form an evaluation of selected topics. We, however, do not recommend the questions and topics that should be given priority by HCFA(now known as CMS) in putting together a final evaluation design.
We focus our evaluation design on changes brought about by the HIPAA legislation. In doing this, we propose designs to measure the effects of reform packages that have been adopted to conform to HIPAA, but we do not propose designs to evaluate the generic elements of group or individual market reform in HIPAA (such as guaranteed issue, guaranteed renewal). Many of these generic elements had been enacted as small group reforms in most states prior to HIPAA and there are a number of evaluations that have been produced or are underway to evaluate these. We limit our proposed evaluation to studying packages of market reforms that are subsequent to the HIPAA legislation.
We emphasize implementation questions and qualitative designs. We focus on implementation questions and qualitative studies because there exist limited data for quantitative investigation. Even with ongoing surveys, lags for most data mean that data for 1998 (the first full year of HIPAA implementation) would not be available for analysis until 2000 or even later, delaying information until late 2001 or later. Moreover, for a more complete quantitative evaluation of the impacts of HIPAA, an evaluator would prefer to give the legislation time to play out its effects. Thus, one would want to evaluate a year later than 1998, delaying results even further. However, Congress will want more timely feedback on the legislation and its effects. Our proposed evaluation plan does include some quantitative components, but they are limited to simple quantitative indicators that can be gathered quickly, and to analyses using the Current Population Survey in order to gain early results.
In addition, most observers believe that the magnitude of HIPAA’s effects will be small and concentrated among small segments of the population, such as those in at-risk industries, or persons in poor health—our literature review contained in Part II confirms this. HIPAA was designed to eliminate the most grievous inequities in the insurance market. Therefore, it will be difficult to show measurable effects with most existing data collection efforts because they are general population surveys, and so do not have a sufficient sample of target groups. Furthermore, it is difficult to design surveys or studies to identify representative samples of these vulnerable target groups.
We also focus on implementation issues in our design because an extensive literature shows that an effective implementation process is integral to successful policymaking, in part because program objectives are likely to be interpreted differently by various levels of government. Conceptually, we anticipate that certain barriers will emerge that will be difficult for individual HIPAA eligibles to surmount given their diffuse interests relative to the concentrated interests of the insurance industry. In particular, prices quoted to HIPAA eligibles may exceed prevailing rates in the individual market. In some cases, reforms brought about by HIPAA may also lead insurers to raise group rates. Further, insurers have little incentive to encourage brokers to enroll HIPAA eligibles, and may, as anecdotal evidence indicates, also delay the application process. Although employers have little incentive to work on behalf of individual HIPAA eligibles, they may have a corporate objective to convince remaining employees that the firm will facilitate HIPAA coverage. If implementation is to be facilitated, some concerted effort by the state and HCFA(now known as CMS) will be needed to overcome these barriers.
According to a recent GAO report, state insurance regulators have encountered implementation barriers resulting in part from the lack of federal guidance. Before policymakers and stakeholders can take action to address the perceived weaknesses in the HIPAA structure, we must accurately assess how HCFA(now known as CMS) and the states are enforcing HIPAA provisions, what seems to be working, what the potential barriers to implementation are, and what covered populations or services have been most affected by the implementation process. Therefore, our evaluation questions include assessing the extent to which these and other barriers limit HIPAA coverage and the extent to which the state and HCFA(now known as CMS) adopt policies to overcome these barriers. Finally, because HIPAA is viewed by many as a model for the new Federalism, understanding the implementation barriers may be as, or more important, than quantifying outcomes.