If you read a newspaper (I am talking “paper” newspaper, but also this is relevant to digital newspapers too), there are tons of ads about health insurance and open enrollment. Now is the time to change health care plans or insurance companies or re-enroll in the plan you have. This is the main window for everyone in the US to sign up for health insurance or tweak your plan. Recently I had met Dr. Vish Banthia, the doctor who came up with the concept of ZendyHealth.com. Originally ZendyBeauty.com, ZendyHealth.com is an online platform that helps you find the services you might be needing and to negotiate a price for it. It’s very smart idea to create a platform that helps you negotiate prices on services that might not be covered fully due to high deductible and I have written about this platform before. When Dr. Banthia volunteered to write about open enrollment and how to understand the process of the various issues or topics that arise when selecting a health care plan. I thought it sounded perfect! Dr. Banthia is our featured guest blogger for today!
(Photos & graphics are courtesy of ZendyHealth.com)
If you’re one of the millions of Americans who pays for his or her own insurance as an individual (and not through your employer), open enrollment is here and that means it’s time to make some important decisions for your healthcare. It’s time to decide what type of plan you will be utilizing in the coming year. For some of us, it’s a simple decision-based on medical background history and current income. For many, there are a lot of factors that go into this hugely important choice. Not helping matters are the daunting number of choices, the terminology, and the lack of definitive resources to assist you. As a doctor at the forefront of customer interaction with health care decisions, I’d like to offer my expertise to help guide you to make the health care decision that’s right for you. Let’s talk about open enrollment, some of the key terms to know, the various choices you have in terms of picking a health care plan, and the factors influencing your health care decision.
First, what exactly is open enrollment?
Open enrollment is the yearly period when people can enroll in a health insurance plan through the Health Insurance Marketplace. For 2016 coverage, the Open Enrollment Period begins November 1, 2015 and ends January 31, 2016. This means that the time for you to pick your healthcare plan for 2016 is right around the corner. Before we get into the specifics of plans, let’s delve into some of the terminology used by healthcare:
A premium is the fee paid for health insurance, usually monthly or annually. Those concerned with high premiums, or those choosing health care on a tight monthly budget are encouraged to choose an HDHP (high deductible health plan).
A deductible is a specified amount of money that the insured must pay before an insurance company will pay a claim.
A co-pay is a type of insurance policy where the insured pays a specified amount of out-of-pocket expenses for health-care services such as doctor visits and prescription drugs at the time the service is rendered, with the insurer paying the remaining costs.
Co-insurance is a type of insurance in which the insured pays a share of the payment made against a claim –for
example, many patients pay 20% or more for their hospitals stays as co-insurance.
The different types of health plans available:
Health Maintenance Organization (HMO):
A type of health insurance plan that usually limits coverage to care from doctors who work for or contract with the HMO. It generally won’t cover out-of-network care except in an emergency. An HMO may require you to live or work in its service area to be eligible for coverage. HMOs often provide integrated care and focus on
prevention and wellness and require the patient to choose a primary care provider through which care is coordinated. The downside in having an HMO plan is that one cannot go to just any provider – the provider must be part of the HMO network. If one has a complicated condition requiring the need of super specialists, having an HMO may not be the best idea as not all HMO networks have the right specialists with expertise in every type of disease out there.
Exclusive Provider Organization:
This is similar to an HMO; however, one is not mandated to have a primary care physician through which care is coordinated. A plan member can generally see a specialist or other care provider without the need of a referral from a primary care physician but only if he/she use doctors, specialists, or hospitals in the plan’s network (except in an emergency). This provides more flexibility as one doesn’t have to go through their primary physician to get to the end-goal specialist.
Preferred Provider Organization (PPO):
A type of health plan where you pay less if you use providers in the plan’s network. You can use doctors, hospitals, and providers outside of the network without a referral for an additional cost. These are generally the preferred plans that
providers like to accept as they reimburse the most, generally speaking – so if you are looking for flexibility In who you want as a doctor, you’re better off going the PPO route in most cases.
A high-deductible health plan (HDHP):
A health insurance plan with lower premiums and higher deductibles than a traditional health plan. Being covered by an HDHP is also a requirement for having a health savings account (HSA).
A health savings account (HSAHSA ) is a tax-advantaged medical savings account available to taxpayers in the United States who are enrolled in a high-deductible health plan. The funds contributed to an account are not subject to federal income tax at the time of deposit.
There are a number of factors to consider when seeking the health plan that is right for you. Do you have specialized medical needs? Are you paying for health insurance on a budget? Are you relatively healthy and only see healthcare as a necessity as a result of an accident or unexpected illness? If you answered yes to these questions, then an HDHP with an HSA might be the answer for you. According to the Kaiser Family Foundation/ HRET survey in 2014, the average family HSA plan costs nearly $2,900 per year less than the average HMO plan and $2,800 less than the average family PPO plan.
Keep in mind that most healthy Americans in their 20s-30s use very little in terms of medical services per year so it does make sense to save on premiums by choosing a high deductible health plan (which is essentially what many consider a catastrophic plan). That being said, I have seen patients who are in their 30s who come down with recurrent sinusitis or have a neck mass – and they may need a CT or MRI scan that can cost $1000 or more at a rate that was negotiated by their insurance networks. If you happen to have a high deductible plan in this case, you’re stuck paying the $1000 or more out-of-pocket. This is where patients can get more informed about pricing and shopping for more cost-effective solutions. Many digital health start-ups, such as ZendyHealth, are tackling this issue so that this so-called ‘high-deductible gap’ is not so painful.
As an example, that same MRI from that same stellar radiology facility that charges $1000+ will now potentially accept a self-pay cash offer for that scan through ZendyHealth for $450 or even less. So patients can save as they become more aware of the tools out there to help deal with the increased out-of-pocket expenditures that we are all facing.
Choosing an HSA plan will provide copious tax benefits as well. According to the 2014 Devenir Year End research report, the average HSA account receives about $1,600 in total contributions. The tax savings from this activity accrue to the account holder, regardless of whether an employer or someone else makes the deposit. Even at today’s low average contribution levels, the average HSA account holder receives somewhere between $20 and $40 per month in tax savings. Combine that with the low monthly premiums most HDHPs entail, and your savings increase even more. For those choosing an HSA, you can use your savings account not just for tax benefits, but also to pay for many procedures not covered by your health plan and also to pay for services if you have a high deductible. Dental work (including dental implants), allergy testing, vision procedures (including Lasik), and other procedures can be paid for through your HSA. For those considering these and many other procedures, I’ve dedicated ZendyHealth to finding the right fit for medical treatments while empowering patients to make smarter financial decisions when it comes to managing their healthcare dollars in what many consider a rather opaque system.
Bio: Dr. Vish Banthia
Dr. Banthia is a double Board Certified surgeon and a graduate of Stanford, UCSF, and Columbia / Cornell University hospitals. Dr. Banthia and his Medical Advisory Team are responsible for the vision of ZendyHealth and the array of services and procedures that can be delivered to the consumer in safe and cost effective ways. Dr. Banthia has specialized expertise in minimally invasive procedures and has delivered lectures to plastic surgeons, facial plastic surgeons and dermatologists throughout the country as well as internationally. In 2006, 2008, and 2011, Dr. Banthia was recognized as a “Top Doctor” or “Top Surgeon” in Silicon Valley.
Zendy Health: Learn more by watching this video!
Thank you to Dr. Banthia for this great article. He has broken done everything you need to know into “bite-size” bits of information that make it easy to take the information you have and the information you are wondering about and actually understand the process.
I highly recommend ZendyHealth.com. It’s going to be something on my list to use for things insurance won’t cover or doesn’t cover sufficiently!
Stevie Wilson,
LA-Story.com
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This topic needs to be covered constantly, and you did an excellent job of presenting the issues. Most people who are eligible know almost nothing about the options. I happily started an HSA many years ago and am now going into Medicare, so I could not be happier with the excess funds in the account. Great information here!
Dr. Banthia did do an incredible job. When I met him recently we spent a lot of time talking about ZendyHealth.com (his startup platform) and how it works in conjunction with HSA. My comment was that I knew what HSA’s were but not exactly where they fit into the insurance situation. Once I learned, I knew that the way he explained was so easy, so simple that it made perfect sense for him to do a guest post!
Stevie