Maximize Your Health Insurance Investment

7 considerations for consumers to get the most from healthcare dollars

SAN MATEO, Calif., Oct. 8, 2008 – About 60 percent of employers offer health insurance, and the average employee pays $3,000 annually for health coverage.(1) In addition are the many individuals, employees and retirees who purchase their own insurance. Ethan Ewing, president of free online consumer portal, reminds individuals that they should make careful choices about these costs that make up 6 percent of median income(2) and deeply affect their well-being. provides extensive information on health care via its health insurance portal at /health-insurance/. Ewing reminds health care consumers of these key considerations when planning health care coverage.  

1.  High-deductible plans: Plans with high deductibles mean beneficiaries carry a higher amount of financial risk in exchange for much lower monthly premiums. "While the monthly savings can be appealing, be cautious about signing onto such a plan unless you are sure you can cover the deductible amount," Ewing said. "In fact, some experts suggest that high-deductible plans should only be used by the 'healthy and wealthy.' But if you have no other options and can afford a high-deductible plan or a catastrophic care plan's premium, these plans will protect you from the bulk of the health care costs, while you pay only up to the deductible plus co-insurance." Find out more about the health savings accounts that go along with high-deductible plans at /hsa-health-savings-account-article/.

2. PPO, HMO or indemnity: Indemnity coverage is "old-fashioned" coverage where the beneficiary pays a portion of costs and the insurance company pays the rest. Most plans today are HMO (health maintenance organization) or PPO (preferred provider organization) managed care plans. With these plans, the beneficiary pays a co-payment for medical care visits and has an annual deductible for certain expenses. Be sure your preferred physicians are in the plan's network, or you might pay higher-than-expected co-payments and fees. Research types of plans here. (/health-insurance-basics-article/ 

3. Coverage limits: Many plans today limit coverage with daily maximums or co-insurance. Sometimes daily limits are as low as $1,000 per day -- a drop in the bucket if you are hospitalized. Also consider the lifetime maximum, as a bout with cancer could easily exceed a $1 million or $2 million lifetime maximum. 

4. Co-insurance: Co-insurance is the portion of care the consumer pays after reaching the deductible. The best plans have 100 percent co-insurance, meaning the plan pays for everything after the deductible. For example, 80 percent co-insurance means the plan will pay 80 percent and the consumer pays 20 percent. Be cautious -- with 80 percent co-insurance, a $100,000 hospitalization leaves the patient owing $20,000.  

5. Flexible spending account: A flexible spending account (FSA) is a tax-benefited account that allows employees to be reimbursed for medical and dental expenses on a pre-tax basis. Those whose employer offers an FSA should calculate anticipated annual expenditures carefully to select an annual amount that will maximize their tax benefit. "Then, make plans for how you will obtain reimbursement for your costs. Otherwise, you will be throwing away part of your salary," Ewing cautioned. Learn more at  

6.  Mandatory coverage: Most group health plans must cover all employees, regardless of health status. Individual health plans do not have the same restriction. Pre-existing conditions can be excluded from coverage, or a person can be denied coverage altogether. "In this situation, look into your state's coverage options," suggested Ewing.  

7. Additional coverage: Medical coverage should be prioritized, because costs for chronic conditions or injuries can soar into the thousands or millions of dollars. If cost is an issue, dental insurance and vision insurance can come second, with the exception of a person with extraordinary needs. Also, individual insurance policies usually exclude these coverages because their costs generally are predictable rather than catastrophic. To find out the value of coverage, ask your dentist, orthodontist and ophthalmologist what their services cost. Professional offices can provide rates for you to compare with premiums.

"Health insurance coverage is one of your most important benefit choices," Ewing said. "Carefully consider the options to make sure you are protected if and when a medical situation arises." 

About (

Based in San Mateo, Calif., is a free one-stop portal where consumers can educate themselves about complex personal finance issues and comparison shop for products and services including credit cards, debt relief assistance, insurance, mortgages and other loans. As the online portal to Freedom Financial Network, LLC, the company has served more than 40,000 customers nationwide since 2002 while managing more than $1 billion in consumer debt. Its RSS feed is available at /news_releases/ holds the No. 257 spot on the Inc. 500 list for 2008, and the No. 3 spot on Entrepreneur Magazine’s Hot 100 list of the fastest-growing U.S. companies. also was named a finalist as “most innovative company” in the American Business Awards in 2008. Company co-founders and co-CEOs Andrew Housser and Brad Stroh were named to the Silicon Valley/San Jose Business Journal's "40 Under 40" list in 2008, and are recipients of the Northern California Ernst & Young 2008 Entrepreneur of the Year Award.