What does HIPAA stand for?

Put simply, HIPAA stands for the Health Insurance Portability and Accountability Act of 1996. However, the title of the act does little to explain its purpose. HIPAA essentially established standards for protecting health information and reformed aspects of the health insurance industry to make it fairer for policyholders. The act is often incorrectly referred to as the “Health Information Privacy and Portability Act”.

HIPAA was borne from a complicated healthcare insurance landscape that varied between states. Health insurance was initially offered as accident insurance (first by the Franklin Health Assurance Company of Massachusetts) or employer-sponsored disability insurance. However, many insurance providers fell foul of legislation as they indirectly provided health services to their customers, so they were banned as “unlicensed practitioners of medicine”. Improved laws regulated what services for-profit insurance companies could provide, meaning they could operate within particular remits.

The improved laws, however, had their complications. By the end of the 20th century, many separate acts governed different types of policies; individual states legislated on group health plans, while the Employee Retirement Income Security Act of 1974 (ERISA) and the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) related to employer-sponsored and individually-purchased policies. These multiple legislations created a confusing landscape pertaining to the portability of insurance plans between jobs or how individuals access benefits.

Learn more about what HIPAA stands for here.