HIPAA, or the Health Insurance Portability and Accountability Act, was passed by Congress in 1996. It became one of the most groundbreaking technological mandates, as it requires organizations that deal with patient data, of any format, to create and maintain extremely high security policies. This legislation pertains to doctors' offices, hospitals, pharmacies, and health insurance providers, creating an extra cost that is passed onto the consumer.

HIPAA was passed for many reasons. One of the major reasons was to ensure the privacy of patients, including sensitive personal data, such as social security numbers, telephone numbers, and addresses, as well as private medical data, including test results, diagnoses, and information shared with medical providers. The act, while it provides a great service to patients, comes with its negatives, mainly in the form of costs. HIPAA guidelines require all medical providers to send and issue privacy statements and other informational guides to all patients and consumers, creating extra costs. Medical agencies and insurance providers must also hire professionals to create, maintain, and audit their policies in order to establish and prove compliance. HIPAA training is also necessary for all those employed within the healthcare industry. Primary and continuing education costs insurance company millions of dollars every year, cutting into their pockets. This all creates extra fees that are eventually passed onto the patient in the form of rising premiums.

An often overlooked section of HIPAA provides that companies must extend health insurance to families and workers in the event of a job change or loss. This stipulation, despite being extremely important to consumers, can cause major losses for employers and health insurance providers. Insuring families with little or no income usually means the patients will default on their bills, leaving service and insurance providers to pay the bill. In order to combat these losses, many insurance providers and employers have calculated a default rate into premiums, which causes employees and their families to pay more. With the lack of government-provided healthcare, this mandate is necessary for many Americans. However, it creates more problems for those employed who are currently struggling with the high price of health insurance premiums and medical bills. Since this service costs more for health insurance providers, it is ultimately passed onto the consumer, a practice that many deem to be unfair.

While the HIPAA guidelines were established to protect healthcare consumers and patients, the legislation has brought about unwanted side effects. Training, patient communications, and policy creation is costing health insurance companies more money than ever before. With healthcare companies passing on their inflated costs of HIPAA compliance, many Americans are continuing to struggle to pay their expensive health insurance premiums.