What Makes HIPAA So Important

When you have a pre-existing condition, it can be difficult to get insurance coverage. If you delay obtaining insurance coverage until you know you are sick and need treatment, it is an action referred to by insurers as adverse selection. It is adverse because in order for insurance to work with existing premium payment structures, it cannot be purchased only by individuals with costly medical treatment expenses. Insurance must be purchased by a large number of individuals in order to protect against the potential of a serious illness or injury.

One way that health insurance companies protect themselves from adverse selection is to create pre-existing condition exclusions that allow them to collect premiums and provide protection for treatment of injuries and illnesses that are unrelated to the pre-existing condition while excluding claims that are related.

HIPAA, the Health Insurance Privacy and Accountability Act, limits the pre-existing condition restrictions that a group health insurance arrangement can enforce. It gives group health plans the ability to exclude conditions for the first 12-months (in some cases 18-months) only if the insured had a significant break in creditable health insurance coverage (which excludes coverage like major medical) that lasted more than 62 days. This protection means that as long as you have continuous coverage, a group policy cannot exclude your pre-existing condition.

But HIPAA also protects the privacy of your medical records, something that’s become increasingly important in this digital age. The way that your sensitive health information is handled and disbursed is tightly regulated and penalties are explained within the act, giving many businesses the encouragement they needed to train staff in proper data handling and enforce compliance.

Between helping secure your coverage and protect your information, HIPAA is one of the most valuable legislative protections to affect the insurance industry in recent years.

Check with Strunk Insurance today to make sure your Oklahoma City Insurance has you covered.