What Does Portability of Health Insurance Mean?

The Past and Future of Health Insurance Portability

A doctor and a nurse working together.
A doctor and a nurse working together. Blend Images - Jose Luis Pelaez Inc/Getty Images

What Does Portability of Health Insurance Mean?

There are two aspects to the concept of portability that are important in a healthcare reform conversation. The Health Insurance Portability and Accountability Act (HIPAA) protects American workers' access to health insurance when they change or lose their jobs by making sure preexisting conditions do not inhibit someone's access to health insurance.

Since the insurance is employer-based, however, the worker must make a change to his or her insurance company and plan when job changes are made; health insurance is not portable from one employer to another.

This becomes particularly problematic, because each year fewer employers offer health insurance as a benefit. Therefore, many employees feel indentured to their employers; they can't change jobs, because they can't afford to lose their health insurance.

Many experts in healthcare reform insist that portability needs to shift to the individual, away from the employer. That would mean that once an individual is accepted in to a healthcare plan and continues to make the necessary premium payments, he or she would be able to continue obtaining healthcare services through that plan even when they leave the job.

Portability After the Affordable Care Act of 2010

The Affordable Care Act (ACA) requires individuals to purchase health insurance or pay a penalty. It expands access to health insurance by eliminating discrimination for preexisting conditions, high usage of health care and genetic information.

However, insurance is still obtained either through group plans provided by employers or by purchase through health exchanges. Changing employers or moving to a different state means that a person must choose a new health plan. The health exchanges make this an easier one-stop experience, but still require making many decisions for cost, coverage, benefits, providers, deductibles and more.

HIPAA and Portability

If you lose coverage under your existing health plan or need to change coverage due to specific life events, you have rights for special enrollment in a new plan outside of the usual open enrollment period. Life events listed include losing coverage under your spouse's plan or parent's plan due to death, divorce, loss of job by spouse or parent, reduction of work hours and moving out of the area served by your HMO.

Under HIPAA and the protections added by the ACA, health plans cannot deny coverage for health status, medical and mental illness, your history of claims and heath care usage, disability, medical history and genetic information. They cannot require you to have a physical exam or answer a health questionnaire and then use that to exclude you. Also, if you enjoy a high risk activity like skiing you can't be denied coverage by a plan, but they may limit their benefits if you get injured doing that activity.

See More: FAQs about Portability of Health Coverage and HIPAA

The Future of Portability of Health Insurance

With changes in the political power in Congress and the presidency post-Obama, there will many attempts to modify the Affordable Care Act. Consumers will need to stay abreast of the debate and let their representatives know what they value most in regulation of health insurance.

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