Major Health Care Bill, Sponsored by Edward Kennedy and Nancy Kassebaum, is Signed into Law

The Health Insurance Portability and Accountability Act shows what happens as Sen. Kassebaum said and Sen. Kennedy said when we work together, when we cross party lines and put the interest of the American people first. This bill is a clear boost to our values as Americans. It offers opportunity by allowing people to take their health insurance from job to job. It rewards responsibility by helping people to work who desperately want to work. It brings us together in a common community to do what's right by all of our people, saying that we ought to make it possible for more and more people to succeed at work without losing the security of knowing that when they heed health care it'll be there.”

— President Bill Clinton

In 1996, Kennedy secured an increase in the minimum wage law, a favorite issue of his; there would not be another increase for ten years. Following the failure of the Clinton health care plan, Kennedy went against his past strategy and sought incremental measures instead. Kennedy worked with Republican Senator Nancy Kassebaum to create and pass the Health Insurance Portability and Accountability Act in 1996, which set new marks for portability of insurance and confidentiality of records. The same year, Kennedy's Mental Health Parity Act forced insurance companies to treat mental health payments the same as others with respect to limits reached. In 1997, Kennedy was the prime mover behind the State Children's Health Insurance Program, which used increased tobacco taxes to fund the largest expansion of taxpayer-funded health insurance coverage for children in the U.S. since Medicaid began in the 1960s. Senator Hatch and First Lady Hillary Rodham Clinton also played major roles in SCHIP passing.

The Health Insurance Portability and Accountability Act (HIPAA) was enacted by the U.S. Congress in 1996. According to the Centers for Medicare and Medicaid Services (CMS) website, Title I of HIPAA protects health insurance coverage for workers and their families when they change or lose their jobs. Title II of HIPAA, known as the Administrative Simplification (AS) provisions, requires the establishment of national standards for electronic health care transactions and national identifiers for providers, health insurance plans, and employers. This is intended to help people keep their information private, though in practice it is normal for providers and health insurance plans to require the waiver of HIPAA rights as a condition of service.

The Administration Simplification provisions also address the security and privacy of health data. The standards are meant to improve the efficiency and effectiveness of the nation's health care system by encouraging the widespread use of electronic data interchange in the U.S. health care system.