What is HIPPA and why is it important?

  • Posted on: 20 March 2015
  • By: daniele

What is HIPPA and why is it important?


HIPPA or otherwise known as the Health Insurance Portability and Accountability act of 1996 was enacted on August 21, 1996 by President Bill Clinton. It’s also known as the Kennedy-Kessenbaum Act, after two of its leading sponsors.  HIPPA protects health insurance coverage for workers and their families when they change or loose their jobs. It also requires the establishment of national standards for all electronic health care transactions and national identifiers for providers, health insurance plans, and employers.

HIPPA’s Primary function is to make it easier for people to keep health insurance, protect their confidentiality and security of their healthcare information. It also controls the  administrative cost. So why is this important to most Americans? Well most of us believe that our medical and other health related information is private and should be protected, and we obviously want to know who has this information at all times. The Privacy Rule, a federal law, gives everyone rights over their personal health information and sets rules as to who can look at and receive your personal information. This Privacy Rule applies to all forms of personals protected health information, whether it is written, electronic or oral.

                The reason this is so important to most Americans, is because we don’t need or want anyone who doesn’t have access to our personal and confidential information. So who has access to this information?

Health care plans: this includes insurance companies (like Blue Cross Blue Shield, CIGNA), HMO’s, company health plans, and Government programs like Medicaid and Medicare.

Healthcare Providers and clearinghouses: Doctors, clinics, hospitals, and psychologist, dentist may conduct business electronically such as bill payment. Clearinghouses process information that is not normally standardized, from other entities and standardize them into electronic format or vice versa.

HIPPA’s important because in short it regulates who can access your personal health information and what they can do with it. There has to be a valid reason for use, no one can just pick up and say “hey I want to look at Mr. Smith’s records to see what’s wrong with him or if he owes money” it provides safety and security. It also provides safety for large corporations and small business. It doesn’t let anyone look into company’s employee files and gather information, OF ANY KIND, unless there’s a valid reason.