The Heritage Foundation and ALEC are pretty much joined at the hip. They're the think-tank end and ALEC the practical enactment end. And googling "Heritage Foundation" and HIPAA brought up the item below, from the time of the ACA battles in 2010.
As nearly as I can tell, it's a deregulation issue with them. HIPAA limits the ability of insurance companies to deny or cancel insurance, provides for federal oversight of much of the health care system, and enacts penalties against fraud and abuse -- all of which the right would just as soon do away with.
Looking at what's quoted below, it also seems that they're not too fond of the system of employer-provided insurance in general and would rather that individuals were at the mercy of the open market. So my guess is that they're hoping to piggyback on either anti-ACA sentiment or a possible Supreme Court decision to do away with HIPAA into the bargain.
http://blog.heritage.org/2010/02/02/lessons-from-the-recent-past-rumors-of-obamacare%E2%80%99s-death-are-premature/
Clintoncare would have mandated guaranteed issue (insurance companies can’t deny coverage), community rating (everyone pays the same, regardless of age or health status), and would have prohibited insurers from canceling policies under any circumstance. Many states implemented these policies after the quiet death of Clintoncare on the Senate floor in 1994. In addition, the Health Insurance Portability and Accountability Act (HIPAA) created guaranteed issue, guarantee renewal, and limits on pre-existing conditions for group-to-group and group-to-individual changes in coverage. The aim was to create “portability” in health insurance, but real portability only exists when persons can own and control their health insurance coverage and take it with them from job to job, like other types of insurance. . . .
Clintoncare would have allowed federal agencies to collect and use health records, from clinical encounters to financial transactions, for a broad array of usages. Republicans in Congress strongly opposed such provisions at the time of the debate on the Clinton Plan. But, with the enactment of HIPAA in 1966, Congress gave the federal government the ability to set standards for health information transactions and the use of personally identifiable health care information. . . .
Clintoncare would have increased federal oversight and control of medical practices by expanding the range of auditing and federal investigations of health programs and doctors and hospitals. As a general matter, the Clinton bill was a vehicle for federal coercion, and chock full of fines, penalties and jail terms for persons who would not comply with its provisions. But, once again, the provisions enacted through HIPAA with regards to this were practically identical to those in the Clinton bill. HIPAA, of course, created a fraud and abuse control program and established new fines and penalties for doctors.
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