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Historical Background of the HIPA Act 1996, Essay Example
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The Bill Clinton administration pioneered much of the call for policy redirection to address inherent lapses in the Health Insurance sector of the United States. Consequently, the infamous Health Insurance Portability and Accountability Act (HIPPA) of 1996 became one of the foremost successes chucked in this regard (Jacobs, 2001). The Act amongst other things calls for pragmatic shifts in the conduct and operations of activities that pertain to the services offered by the domestic health insurance industry. Much of the letter and spirit of the provisions contained in the Act provides assurances of access of health insurance coverage to specifically stated employees and individuals that have being specified; but above all the point stretches beyond the access factor to include factors such as the ability of that package to be renewed without recourse to preexisting condition restrictions.
To oversee the successful implementation of the Act, provisions were made for the creation of across board uniformed standards for stakeholders such as health maintenance organizations, insurers, employer-provided health plans among a host of others. Of course the implementation process was never cast in iron and stone, but made significant maneuvering latitude as part of the process of implementation for stakeholders (Thorpe, et al 2001). One of the highly featured components was the incorporation of tax provisions that regulate health insurance implementation processes in a broad spectrum structure. With this provision in mind, a contingency plan had also been put in place, to reflect the flexibility string, by catering for a chunk of private entrepreneurs and self-employed folks to enhance their engagement in tax-advantaged medical savings accounts (MSAs) to complement high-deductible health insurance plans ((Thorpe, et al 2001, Pollitz, et al, 1999). The nature of the flexibility of the project facilitated an increase in the entitlement of self-employed individuals in their health insurance claims.
The Impact of Political Action Groups
One of the cardinal aspects of the Act is the ability to incorporate innovative elements into the letter which eventually guaranteed efficiency and speed in the management of administrative data whilst ensuring the highest possible standards of privacy (Armstrong et al 2005). It should be noted that the electronic mechanization that accompanied the entire process was duly covered by the regulatory statutes. Meanwhile, the Health Insurance Portability and Accountability Act 1996, have undergone a number of amendments aimed at making reflect and addressing dynamic emerging realities along the way (George, 2003). Some of the facets that received attention included the original provision of the HIPA Act 1996 that enjoined collective or group health plans; the provision of parity for selected mental care services; the requirement by hospitals and authorities to incur the cost of maternity services.
However, two years down the line after the enactment of the Act, profound enactments that enjoined access to health insurance claims to cover a broader spectrum of cases that were hitherto not included in the original Act passed in 1996 (Weissert & Weissert. 2002). Some of them include the requirement that compelled health insurance plans to be accessible for claims that were hitherto restricted to mastectomy to be extended to include coverage for reconstructive breast surgery; which also in the same breadth have made provisions for the deduction of premiums incurred by self-employed taxpayers.
One of the primary objective of the Clinton Administration in coming out with the HIPA Act 1996 was to provide a convenient platform that will in the long run coordinate as well as streamline electronic information dissemination in the health insurance industry (Baumgartner & Jones, 1993). Prior to the Clinton era, there had already been concerns as far back as 1982 to establish a nationwide streamlining process that culminated into the Health Care Financing Administration claims forms.
The Impact of Special Interest Groups on the HIPA Act 1996
In many respects, the United States has a very complicated health financing system that impacts profoundly on the insurance industry as well. The system has both public and private funding mediums that exert often diverse influences on the overall functionality of the insurance legislative regime including the current one in question (George, 2003). Judging by this complex terrain that surrounds all that is taking place within the industry, it is understood that public opinion under the most ideal situation become the guiding principle for the structuring of public policy; the veracity or otherwise of this position will be discussed in this section.
To begin with, it is worth noting that under the current dispensation of the HIPA Act 1996, not all employers are obligated to comply with the provisions contained in both the letter and spirit of the HIPA Act 1996. Naturally, this may seem logical since almost all statutes makes provisions for one or two exceptions with regards to implementation, especially when it becomes evident that the implementation of one provision or another is wrought with conflict. The concern however, with some of the exceptions made under this Act have some external special interest influences to blame (Schaeffer, 1996; Robinson, 2004). Take a few illustrations as a case in point– in many ways there is reason to believe that some powers that be have skillfully exploited what appears to be a subtle weakness in the Act to their advantage. Could this be an act of purposeful design or a genuine legal shortcoming is a question that is clearly begging. Within the provisions of the Act, there is the possibility of any nonfederal governmental group plan to pull out within reasonable time on condition that it is able to meet some laid out conditions, which are very easy to be met. The absurdity is the grey spot left about insured and self-insured health plans.
Against this background, the American Federation of State, County and Municipal Employees (AFSCME) remains skeptical about the pull-out provisions, especially its implementation within the paradigm. Clearly, the pull-out scheme is certainly wrought with some difficulties that cannot be casually resolved without intense insider lobbying to get all sides reach a compromise, bearing in mind that the implications have far reaching political consequences (Christianson, 1997).
Suffice to cite the case of Blue Cross Blue Shield of Michigan (BCBSM) as yet another shining illustration of the impact of special interest groups when it comes to navigating the course of the Health Insurance Portability and Accountability Act 1996.
In what was an overt act of unfair intrusion by an agency that exerts strong leverage, the Blue Cross Blue Shield of Michigan (BCBSM) lobbied for the imposition of strict state regulatory provisions as a means of weeding out other competitors within the small group market insurance (Blue Cross Shield, 2002; Borsch & Huynh, 2004). The primary motivation of the (BCBSM) in initiating and towing this line was visibly to halt the practice of commercial insurance agencies attracting and maintaining low-risk customers as opposed to maintaining high-risk clients within its sphere of influence (Barkholz, 2002). At the end of the day, BCBSM were amazed by the fact that their quest had turned out to be a fiasco. Why? A good question to ask. Indeed, judging from the fact that there is nothing entirely new about the reform that BCBSM was championing taking cognizance of the fact that a good number of states in the country had successfully adopted and implemented similar reforms already. In the case of BCSM it failed to garner the needed support because of the inherent sticky politics that clouded the entire proposed reform agenda (Resch, 2002).
The Impact of Lobbyist on the HIPA Act 1996
Arguably, with the coming into force of this legislation all stakeholders are bound by the tenets contained therein. Making it imperative for all stakeholders to work assiduously to ensure that at any rate their concerns are satisfactorily incorporated into the legislation especially with regards to the part that concerns them the most. It is this tendency that creates the breeding ground for every form of covert and overt lobbying geared at making an imprint (Weissert, & Miller 2005). The Blue Cross Blue Shield reports that should the HIPA Act be implemented then that will definitely come with a huge financial cost of a little above $40 billion to insurance industry players (Stock, S. 2002).
In the early days, there was a consensus among stakeholders with regards to the intentions and purposes of the HIPA Act. However, the alleged colossal financial cost among other things became a source of contention amongst stakeholders. Vocal among the emerging critics were the service providers who felt some subtle witch-hunt especially with the implementation timetable (Wolf & Bennet 2006, Wilson, 2006). Once again lead by the Blue Cross Blue Shield, a number of stakeholders feeling the discomfort arising from the pressure of compulsion to meet the October 16, 2002 deadline embarked on a lobby exercise using Congress as a point of contact to reach draw attention to their concerns, with the deadline extension featuring prominently on the request list (Hubbard, 2009). Eventually, the Administrative Compliance Act received an extension that runs into 2003.
For political expedience arising from the pressure of lobbyists, the groups represented by payers and providers, chucked significant success in their quest. Much of what is seen today of the HIPA Act 1996 is the product of rugged lobby works geared at making significant policy postures in favor of a stated group of stakeholders who stand for an agenda be it economic or political. The main leveraging tool in carrying this out has been through the activities of specialized lobbyists who are close to the power base of the nation (Kollman, 1998).
References
Armstrong D, Kline-Rogers E, Jani S, Goldman E, Fang J, Mukherjee D, Nallamothu B, Eagle K (2005). “Potential impact of the HIPAA privacy rule on data collection in a registry of patients with acute coronary syndrome”. Arch Intern Med 165 (10): 1125–9.
Barkholz, D. (2002). Blues: We’ll Fight State Taking Control of Board: Crain’s Detroit Business April 1. Retrieved on August 21, 2009 at:www.crainsdetroit.com
Barron, D. P. (2000). Business and Its Environment, 3rd Ed: Englewood Cliffs, N.J.: Prentice-Hall.
Baumgartner, F. R., & B. D. Jones. (1993). Agenda and Instability in American Politics: Chicago: University of Chicago Press.
Blue Cross Blue Shield of Michigan Health Insurance. (2003). Reform: Media Overview. Internal report: Aug. 8.
Blue Cross Blue Shield of Michigan. (2002). White Paper: Feb. 1.
Borsch, M., S. Ko, and K. P. Huynh. (2004) U.S. Healthcare Services, Managed Care: The Blues and the Underwriting Cycle: New York: Goldman Sachs Global Equity Research.
Christianson, J. B., R. D. Feldman, and D. R. Wholey. 1997; HMO Mergers: Estimating Impact on Premiums and Costs:Health Affairs. 16:(6) 133–141.
Clement, J. P., M. J. McCue, R. D. Luke, J. D. Bramble, L. F. Rossiter, Y. A. Ozcan, and C. W. Pai. 1997; Strategic Hospital Alliances: Impact on Financial Performance: Health Affairs. 16:(6) 193–203.
Coalition for Health Insurance Market Reform. (2002). The Voice of the Coalition: Jan. 10.
Dickerson, B. (2002). Brian Dickerson Column: Detroit Free Press Jan. 25.
George, T. (2003). No: Plan Boosts Competition in Small Market: Detroit Free Press May 23
Hollis, S. R. (1997). Strategic and Economic Factors in the Hospital Conversion Process: Health Affairs. 6:(2) 131–143.
Hubbard, S., and (lobbyist for Detroit Regional Chamber of Commerce). 2009; Personal interview, July 7, Lansing, Mich.
Jacobs, J. A. (2001). Anthem Announces Plans to Convert to a For-Profit. American Medical News. 44:(8) 13.
Kollman, K. (1998). Outside Lobbying: Public Opinion and Interest Group Strategies: Princeton, N.J.: Princeton University Press.
Pollitz, K., N. Tapay, E. Hadley, and J. Curtis. (1999). The Health Insurance Portability and Accountability Act of 1996: Early Experience with “New Federalism.” In Health Insurance Regulation: Washington, D.C.: Institute for Health Care Research and Policy, Georgetown University Medical Center.
Resch, M. (2002). Posthumus Signs Bill Prohibiting “Profitization” of the Blues: Press release. Available at:www.michigan.gov. August 20, 2009.
Robinson, J. C. (2004). Consolidation and the Transformation of Competition in Health Insurance: Health Affairs. 23:(6) 11–22. exhibit 2.
Schaeffer, L. (1996). Health Plan Conversions: The View from Blue Cross of California: Health Affairs. 15:(4) 183–187.
State of Michigan. 2001; Senate Bill 0749 (which became Public Act 559 of 2002; effective Sept. 27, 2002). 91st Legislature. Available at: www.legislature.mi.gov.
Stock, S. (2002). Health Care Costs Threaten Small Business. Small Companies Struggle to Keep Up with Booming Bills:Lansing State Journal April 29.
Thorpe, K. E., E. E. Seiber, and C. S. Florence. (2001). The Impact of HMOs on Hospital-Based Uncompensated Care: Journal of Health Politics, Policy and Law. 26:(3) 543–555.
Weissert, C. S., and W. G. Weissert. (2002). Governing Health: The Politics of Health Policy: Baltimore: Johns Hopkins University Press.
Weissert, W. G., and E. A. Miller. (2005). Punishing the Pioneers: The Medicare Modernization Act and State Pharmacy Assistance Programs: Publius: The Journal of Federalism. 35:(1) 115–142.
Wilson J (2006). Health Insurance Portability and Accountability Act Privacy rule causes ongoing concerns among clinicians and researchers. Ann Intern Med 145 (4): 313–6.
Wolf M. & Bennett C. (2006). “Local perspective of the impact of the HIPAA privacy rule on research”. Cancer 106 (2): 474–9.
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