Affordable Health Insurance. What Impact Would Real Portability Have?

Portability is one of the words that keeps popping up in the health care reform debates and the goal to provide Americans with affordable health insurance. Simply put, portability involves your ability to take your employer-provider health insurance with you if you’re fired or quit your job. Right now, it’s essentially limited to COBRA, a safety net created in 1985, and HIPAA, a program passed in 1996.

COBRA is named for the Consolidate Omnibus Budget Reconciliation Act to which it was attached. It requires that any employer who offers group health insurance must let most employees who are fired, quit or otherwise endure what is called a “qualifying event” continue the employer-provided coverage. Sounds good, except your employer is no longer picking up any of the tab. As anyone who has taken advantage of COBRA will tell you, it is not what you’d call cheap health insurance.  Besides, if your employer went out of business, there’s no coverage to continue.

Another portability issue is pre-existing conditions. Congress sought to address that with
the enactment of The Health Insurance Portability and Insurance Act (HIPAA). Among other things, HIPAA restricts insurance companies from denying you health insurance coverage because of a pre-existing medical condition. It also requires insurance companies to issue or renew coverage for individuals who used to be insured but no longer have access to group health insurance coverage. It is not an open-ended option, however. You have to produce proof that you did indeed have creditable health insurance coverage and you have about 60 days from the time you lost it to apply for HIPAA health insurance quotes.

Like many government programs, COBRA and HIPAA have the best of intentions but fall a little short when the real rubber hits the real road.

COBRA only carries you for 18 months, max (36 months for you spouse and kids if you die, divorce or become eligible for Medicare). And HIPAA is not exactly pure portability, since you may not be offered the same plan your employer had. Your new employer may have a lesser program, or no health care insurance at all. Should you decide to try self-employment, you won’t have the bargaining clout groups have. Depending on your personal health circumstances, you may find yourself in a form of quasi-indentured servitude, reluctant to leave your job for fear of losing the more affordable health insurance your employer provides.

Real portability, some experts insist, would mean a shift of responsibility away from employers and onto individuals, who once they are accepted into a health care plan and continue paying their premiums, would be able to carry their plan with them when they leave their jobs.