However, the community-rating system of charging a flat rate regardless of policy holders´ health meant low-risk individuals were subsidizing the healthcare costs of high-risk individuals. This scheme was extended under the name of “Blue Cross” – initially to other employee groups in Dallas, and then nationwide. Group health insurance as we know it today started in the 1920s with the Baylor University in Texas guaranteeing teachers twenty-one days of hospital care for $6 per year. What Does HIPAA Stand for and the Issues HIPAA Aimed to Resolve? To overcome this gray area of law, many states enacted legislation that enabled commercial providers to operate – the legislation stipulating how providers operated and what services they could offer.Ĭonsequently, by 1995, federal laws such as the Employee Retirement Income Security Act of 1974 ( ERISA) and the Consolidated Omnibus Budget Reconciliation Act of 1985 ( COBRA) governed most employer-sponsored and individually-purchased health plans, while the operations of commercial for-profit group health plans were governed by state laws – leading to numerous issues relating to access to health insurance and health care benefits, and insurance portability between jobs. The reason for the hotchpotch of legislation was that, in the early days, many commercial for-profit health insurance providers were considered to be “ unlicensed practitioners of medicine” because they indirectly provided medical services to policy holders and were subsequently banned. However, at the time, the healthcare insurance industry was governed by a hotchpotch of federal and state legislation. The industry had grown from a handful of companies offering accident insurance in the 1850s – and employer-sponsored disability insurance from 1911 onwards – into a multi-billion dollar business by the end of the twentieth century. To best fully explain what does HIPAA stand for, it is a necessary to look at the state of the health insurance industry prior to 1996. Few articles discussing what does HIPAA stand for explain how a bill with the objective of reforming the health insurance industry evolved into an act of legislation that now controls how healthcare data is safeguarded. The acronym HIPAA stands for Health Insurance Portability and Accountability Act of 1996 and that led to the development of standards for the privacy of Protected Health Information.
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