Medical insurance is a necessary component to any sound financial and business plan for the solo and small firm lawyer. Without proper coverage, you leave yourself open to financial risk and possible financial ruin. Unexpected medical expenses are the largest reason people file bankruptcy. Insurance can be expensive, but not having insurance could cost you more.
There are five main types of medical insurance plans: Indemnity Plans, Health-Maintenance Organization Plans (“HMO”), Preferred Provider Organization Plans (“PPO”), Point-Of-Service Plans (“POS”) and Health Savings Accounts (“HAS”).
An Indemnity plan is a health plan that allows you to see any provider (doctor or hospital, e.g.) you choose without having to pick one in a network. This is the least restrictive of all health plans but is generally the most expensive as well and is not currently a very popular choice for most people. It is an indemnity plan because it pays you or the provider for the costs of the insured events.
An HMO combines an insurance feature with providers of medical care in a network format. You pay a premium cost to use the services of the members of that network exclusively (as long as the services are available in the network). HMO's are considered the most restrictive of all health plans because you must get services “in network”. You have to choose a Primary Care Physician (“PCP”) who is responsible to manage your care and authorize others to provide care to you. The choice of a PCP is made at the time of enrollment and this doctor must be seen first before any specialty care is provided. There is generally no coverage for the costs of going to a provider outside the HMO network of providers, unlike a PPO.
A PPO is a network of doctors, hospitals and other providers that have agreed to provide discounted services through an insurance company. A health insurance policy that includes a PPO encourages you to use the PPO providers by making it cheaper for you to see those providers. You can choose a provider outside of the network, but you will pay more out of pocket.
A POS plan is a hybrid of an HMO and a PPO. It's less restrictive than an HMO but more restricted than a PPO. A POS plan may or may not make you choose a PCP and may or may not provide any out of network benefits. Generally, and this is where the name came from, you chose at the time you need the service whether you will use the HMO option or another option and you pay more or less according to your at the point when you need the service.
An HSA is a tax sheltered account to which you make contributions and then that money is available to pay medical expenses now and in the future. In order to open this account you must have an HSA compatible health insurance plan. These plans are regulated by state and federal governments and must have minimum and maximum deductible amounts.
Health Care Reform recently passed by Congress and signed into law by President Obama deals with the many aspects of health insurance. For up-to-date information as well as the medical insurance coverage offered to ABA members and family members, as well as small law firms, please visit www.abamemberhealthplans.com.