Make Smart Decisions with Your Health Insurance

Health Insurance
As we move from 2015 to 2016, health insurance rates continue to rise. In order to prepare yourself, it’s crucial to have a complete understanding of how health insurance works. Here are basic terms you need to know:

Premium: your monthly, quarterly, or yearly cost of health insurance

Copay: your health insurance policy will specify a specific amount you will be expected to pay out-of-pocket for a service, such as a prescription

Deductible: a set amount of money you will need to pay before your insurer will pay a claim

Out-of-pocket maximum/minimum: The most/least you must pay during the length of your policy before your insurer begins to pay for 100% of covered health benefits. The maximum for an individual plan in 2015 cannot exceed $6,600 or $13,200 for a family plan.

Formulary: a list of particular medications that will be at least partially covered by your insurance plan

Coinsurance: the percentage of the costs of a covered health service that you are responsible for paying (for example, 20% or more of the costs may have to be paid out-of-pocket by you for surgery or hospital stays)

Network: the healthcare providers and facilities your insurer has contracted with to provide services

Now that we’ve covered the basics, you’re on the right track to finding the best healthcare plan that works for you. Before you make your decision, it’s also important to understand that the relationship between out-of-pocket costs and your premium is inverse: that is, a lower out-of-pocket cost means a higher premium and vice versa.

The key is to evaluate your own (and any family members that will be covered under your plan) medical needs, taking risk factors into consideration. Those with chronic illness, children, or any other planned or probable medical care would benefit more from choosing a plan with a lower deductible, as they are more at risk.

However, those who choose plans with higher out-of-pocket costs benefit from much lower premiums.   Some individuals choose high deductible plans not only to save on their monthly premiums but also because they have a Health Savings Account (HSA) thru which they can pay for eligible services while they are under their deductible threshold.  By doing so, many are looking at cost-effective options for procedures using their HAS.

For example, if you choose an HSA-eligible health care service through ZendyHealth, such as a CT or MRI scan, you may be able to make a cost-effective choice that brings you closer to reaching your deductible and by using your HSA.


Written by Dr. Banthia, Double Board Certified Surgeon and Founder of


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