BOX 6-12
Limitations of Individual Market Protections Under the Health Insurance Portability and Accountability Act

Availability barriers

  • Eligibility usually requires election/exhaustion of COBRA benefits

  • Public awareness: As of 2005, group health plans and group health insurance issuers are required to give workers a statement about their rights under the law

Affordability barriers

  • Dramatic premium surcharges in many states

  • No premium subsidies

Adequacy barriers

  • No benefit standard in most states

SOURCE: Pollitz (2004).

Foremost among these is the HIPAA eligibility requirement that individuals have elected and exhausted COBRA benefits and the high costs associated with premiums.15

Inadequate health insurance coverage Consumer cost sharing has increased greatly in recent years, placing a larger financial burden on those with insurance. Employers are asking employees to pay more for health care through higher contributions and deductibles, lower subsidies for dependent coverage, and numerous benefit changes that increase spending at the point of care (Goff, 2004). Out-of-pocket spending for medical services increases with the number of chronic conditions a person has, and large out-of-pocket expenditures can limit access to care, affect health status and quality of life, and leave insufficient income for other necessities (Hwang et al., 2001).

According to analyses of the 2001–2002 Medical Expenditure Panel Survey (MEPS), health-related out-of-pocket expenditures made by those reporting health effects of cancer are high, averaging $1,267 annually for those ages 25 to 64 (13.5 percent of total expenditures) and $1,456 annually (12.5 percent of total expenditures) for those aged 65 and older (Figures 6-4 and 6-5) (see Appendix 6A for a description of MEPS and the


HIPAA does not require exhaustion of COBRA benefits in all circumstances. For example, if a man is dependent on his wife’s employer for health insurance and the wife quits work because of breast cancer and loses coverage, the husband may seek health insurance (if offered) through his employer for himself and his wife

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