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With all due respect to Benjamin Franklin, if early to bed and early to rise were all it took to become healthy, wealthy, and wise, we probably wouldn’t need health insurance. But the plain truth of the matter is that we do. For a solo attorney, health insurance means getting the necessary medical care when confronted with illness or injury. For a principal in a small law firm, a solid group health insurance plan not only offers the obvious medical benefits but also can go a long way to helping attract and keep competent lawyers and staff members. How does one go about finding the right plan for an individual lawyer or a firm? Locating a great policy at a great price is a challenge in the current environment for any individual or small business. As certified financial planner Judy Redpath, who is affiliated with the Washington Financial Group Inc. in Reston, Va., says, “There are so many choices, so many variables.” So whether you hire an agent to help you find the proper policy or plan to do the legwork yourself, there are some things you need to know. Redpath says the three basic options for lawyers are bar association policies, individual policies, and group policies. Neither the D.C. Bar, the Maryland State Bar, nor the Virginia State Bar offers health insurance policies that its members could buy into. Yet the American Bar Association does — through its wholly owned subsidiary American Bar Insurance Plan Consultants Inc. The Chicago-based ABI offers comprehensive major medical coverage to ABA members, their spouses, and their children. The PPO coverage, however, is not available to employees of members, so if you were hoping to insure the nonlawyer members of your firm, you’ll have to look elsewhere. As Reid Trautz, director of the D.C. Bar’s Law Practice Assistance Program, points out, because of the expense of insurance, it generally behooves a solo practitioner who can get medical coverage through his or her spouse’s insurance at work to do so. But if you’re a solo who’s unmarried or unable to piggyback on a spouse’s coverage, you’re probably in the market for an individual policy. As few as two people can qualify as a group for purposes of group insurance. Insurers offer various options and a law firm that is seeking to offer coverage to its lawyers and staff has to make the same sort of decisions that an individual considering policies would. Be forewarned, however: Group coverage can put a dent on the bottom line, particularly at yearly renewal time. There are three main types of health insurance policies: indemnity, or fee-for-service, plans, and those plans offered by preferred provider organizations (PPOs) and health maintenance organizations (HMOs). An indemnity plan allows policyholders, who pay a monthly premium, to use any medical provider they choose. Either the insured or the doctor or the hospital that provided treatment sends the bill to the insurer, which pays part of it. Customarily, the insured has a deductible, which must be met each year before the insurer begins paying. Most indemnity plans pay a percentage, say 80 percent, of what the insurer considers the usual and customary charge for covered services. The insured is obligated to pay the remainder, which is known as coinsurance. A PPO is a form of managed care that most resembles an indemnity plan. Because participating doctors, hospitals, and other health care providers have agreed to charge lower fees for their services, insureds’ cost sharing should be lower than if they go outside the network. If insureds go to a doctor within the PPO network, they will be charged a co-payment, usually something like $10 per visit. Coinsurance will be based on lower charges for PPO members. Insureds who go to medical professionals outside the network will not only have to meet a deductible and pay co-insurance based on higher charges, but also may be asked to pay the difference between what the provider charges and what the plan will pay. HMOs offer a range of health benefits for a set monthly fee. They provide a list of doctors from which an insured must choose a primary care physician. An insured must consult this primary care physician whenever a referral to a specialist is needed. Some HMOs will have no charge for a visit to a doctor; others may ask for a co-payment. An insured who goes outside the HMO is generally not covered unless the HMO offers a point-of-service plan. In a POS plan, members can refer themselves to outside doctors and still get some coverage. A consumer advisory issued by the Agency for Healthcare Research and Quality, the research arm of the U.S. Department of Health and Human Services, warns, “The differences among fee-for-service plans, HMOs, and PPOs are not as clear-cut as they once were. Fee-for-service plans have adopted some activities used by HMOs and PPOs to control the use of medical services. And HMOs and PPOs are offering more freedom to choose doctors, the way fee-for-service plans do. By studying your health insurance options carefully, you will be able to pick the one that provides you with the coverage you need, no matter what it is called.” The federal research agency recommends that insurance shoppers ask themselves some hard questions before settling on a plan: How comprehensive do I want coverage of health care services to be? How do I feel about limits on my choice of doctors or hospitals? How do I feel about a gatekeeper physician referring me to specialists for additional care? How much am I willing to spend on services, on premiums, and on other health care costs? How do I feel about keeping receipts and filing claims? When it comes to cost, says Great Falls, Va.’s Michael Mullen, who is an independent broker, there is one constant: “You pay for flexibility.” So, the less managed your plan, the higher the cost. When asked to give a ballpark figure for the average price of a policy, Mullen warns that there are many factors that influence the price tag. He estimates, however, that a 45-year-old nonsmoker would probably pay from $250 to $300 a month in premiums; a 25-year-old nonsmoker, from $150 to $170. Mullen says that over the last few years, rates have risen an average of 14 percent each year. “Renewal costs are breathtaking in many cases,” says Reston financial planner Redpath, who has seen increases in premiums of as high as 98 percent.

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